Southwest Airlines(US:LUV) ZACKS·2025-04-25 16:31Core Insights - The airline industry is experiencing significant challenges due to the ongoing global trade war, leading to uncertainty in passenger demand and revenue projections [1] - Major airlines, including Southwest Airlines, American Airlines, and Alaska Air Group, have withdrawn their full-year 2025 guidance, indicating a cautious outlook for investors [1] Airline Performance - Southwest Airlines reported weakened bookings throughout the first quarter, while Alaska Air Group anticipates a 6-point decline in second-quarter revenues due to reduced demand [3] - American Airlines provided a modest second-quarter earnings forecast of $0.50 to $1.00, which is significantly below consensus estimates [3] - Delta Air Lines and United Airlines have also expressed caution, with Delta not planning to expand flying in the second half of the year due to disappointing bookings [4] Market Trends - The U.S. Global Jets ETF (JETS), which tracks major airline stocks, has seen a decline of 2.3% over the past week and 27.4% since the beginning of the year [2] - The ETF holds 56 securities, primarily focused on the top four largest U.S. carriers, which collectively account for nearly 10% of the index [5] Travel Demand - There is a notable decline in both domestic and international travel, attributed to a potential economic slowdown linked to the Trump administration's tariff policies [7] - International arrivals to the U.S. have sharply decreased, with a 3.3% year-over-year decline in global visitors reported for 2025, and an 11.6% drop in March compared to the previous year [8] Future Outlook - The near-term outlook for airline stocks remains subdued, with the domestic economy class under pressure until trade negotiations and consumer sentiment stabilize [11] - Despite current challenges, the JETS ETF is still considered a viable investment option due to its diversified exposure to various firms within the airline industry [12]