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This summer, many airlines found themselves in a pickle. One headline: “Air Travel Demand Is Breaking Records. Airline Profits Are Not.” And here’s another: “Summer Travel Is Booming. Why Are Airlines Doing So Badly?”
You get the idea.
Airlines haven’t exactly had the easiest time since the pandemic (or during it), and as 2025 looms, everyone’s looking for good news. On Thursday, two major carriers, American Airlines and Southwest, each delivered some.
American Airlines lifted its EPS forecast for the year. The company’s third-quarter revenue climbed to a record $13.6 billion, jumping 1.2% year over year. And while the airline posted a net loss of $149 million, that was a marked improvement from Q3 2023, when American posted a $545 million loss.
The main good news is that this report looks a lot better than last quarter’s, when American cut its full-year profit forecast. Now, its turnaround efforts seemed to have worked.
“We have taken aggressive action to reset our sales and distribution strategy and reengage the business travel community, which we’re confident will improve our revenue performance over time,” CEO Robert Isom said in a Q3 earnings release.
Meanwhile, over at Southwest Airlines, the primary good news takes the form of a proxy fight update: Southwest struck a deal with activist hedge fund Elliott to avoid a proxy battle.
The company’s earnings looked solid, too. Southwest posted a record $6.9 billion in third quarter operating revenue, a 5.3% YoY increase. The airline also noted that “travel demand remains healthy and bookings-to-date for the holiday season are strong, demonstrating the continued resilience of the leisure travel market.”
For airlines, good news doesn’t necessarily have to be earth-shattering.