Airlines Prepare for Investor Scrutiny Following Lower Summer Fares During July 4 Holiday

People move through Newark Liberty International Airport following a news conference by Transportation Secretary Sean Duffy at the airport, where he announced the reopening of a major runway at the airport, nearly two weeks ahead of schedule on June 2, 2025 in Newark, New Jersey.

Millions of travelers are expected to fly over the July 4 holiday period, but the outlook for the rest of the year still looks murky as airlines wrestle with too many flights and not enough demand.

\"The summer is on sale, which certainly implies lower fares,\" Southwest Airlines CEO Bob Jordan said in an interview late last month.

Domestic airfare this summer is averaging $265 for a round-trip flight, down 3% over last year and the cheapest since 2021, according to fare-tracker Hopper. Airfare in the May U.S. inflation report was down more than 7% from a year ago.

Southwest and a host of other airlines — Delta Air Lines , American Airlines and Alaska Airlines — pulled their forecasts for 2025 earlier this year, blaming an uncertain economic backdrop with the Trump administration's on-again-off-again tariffs and a host of other new challenges, like fewer overseas visitors to the United States.

Things might not be much clearer now as Delta kicks off airline earnings next Thursday, with other carriers set to report later this month.

\"We're stable where we are, but we have not seen an inflection back,\" Jordan said.

In response, airlines have outlined plans to cut unprofitable flights, particularly on off-peak days after the major summer travel season. Airlines make the bulk of their profits in the second and third quarters of the year.

From last Tuesday through next Monday, the Transportation Security Administration said it expects to screen more than 18.5 million travelers at U.S. airports, though no single day is expected to top the nearly 3.1 million travelers that went through checkpoints on June 22, an agency record.

While a sharp economic downturn hasn't materialized, air travel demand hasn't been as strong as some industry members expected last year or in early 2025. On Thursday, U.S. jobs data came in stronger than expected despite some signs of a slowdown in the labor market a day earlier.

\"While the broader macro environment has been more resilient than feared, overall airline industry demand has been tepid,\" TD Cowen analyst Tom Fitzgerald said in a Wednesday note.