Passenger revenue weakness to cast shadow on airline earnings

American Airlines (NYSE: AAL) and Southwest Airlines (NYSE: LUV) are expected to see a year-over-year decline in second-quarter earnings as weaker passenger revenues drag on overall performance, according to Visible Alpha consensus estimates.

While both carriers are expected to post sequential revenue growth in Q2—driven by a seasonal uptick in summer travel—this rebound appears insufficient to offset broader headwinds. Economic uncertainty and a slowdown in both corporate and consumer spending have pressured travel demand compared with the same period last year.

American Airlines’ revenue for the three months to June 2025 is expected to edge down -0.2% year-on-year to $14.3 billion, while Southwest’s top line is projected to fall -1.1% to $7.3 billion. The downturn is largely attributed to softer demand and pricing in core passenger operations, which make up the bulk of each carrier’s revenue. Passenger revenue at American Airlines is forecast to decline -0.7% to $13.1 billion from a year ago, while Southwest Airlines is expected to see a -1.4% drop to $6.6 billion.

Full-year expectations point to only marginal gains. American Airlines’ total revenue is projected to rise +0.3% to $54.4 billion, while Southwest’s is seen increasing +1.4% to $27.9 billion.

Both airlines are scheduled to report second-quarter results on July 24.