U.S. airline lobbying group Airlines for America on March 15 sent an open letter to Congress from its member carriers' CEOs urging the government to fund the U.S. Department of Homeland Security, which has been shut down since Feb. 14. Those CEOs, though, had little to add on the topic while speaking Tuesday at an industry conference.
DHS includes Transportation Security Administration employees, most of whom are considered essential but are no longer getting paid during the partial shutdown. In addition, more than 300 TSA employees have left the agency, resulting in staffing shortages that have caused long security lines at some airports.
The Airlines for America letter cited a March poll conducted by AlphaRoc in which it said 93 percent of respondents supported paying federal aviation workers during government shutdowns. It also urged the passing of the Aviation Funding Solvency Act and the Aviation Funding Stability Act, which would guarantee pay for air traffic controllers regardless of the government's funding status, and the Keep America Flying Act, which would provide the same protections to TSA officers "who are tasked with keeping American secure in the skies."
The letter's signatories included CEOs from Alaska Airlines, American Airlines, Delta Air Lines, JetBlue, Southwest Airlines and United Airlines.
Delta CEO Ed Bastian, when asked this morning on CNBC's Squawk Box if Delta was noticing an effect on operations as a result of TSA staffing shortages, said "we certainly are."
"It tends to be more on the weekend and has tended to be more in the South. This weekend we saw it in Atlanta for the first time, extended lines, and we had winter weather, which accelerated and exacerbated the situation," Bastian said. "It's inexcusable that our security, frontline agents who are central to what we do are not being paid."
Yet, Bastian and executives from other carriers who signed the Airlines for America letter presented Tuesday at the J.P. Morgan Industrials Conference, and none mentioned the shutdown and long TSA lines. Instead, their focus was on strong demand, higher fuel costs, corporate trends and updated guidance.
Alaska Airlines
Alaska did not update its guidance today. President and CEO Ben Minicucci at the J.P. Morgan conference noted that "demand is the bright spot," but the carrier is "a little disadvantaged on the West Coast because of refinery margins."
Minicucci mentioned frustration in California, where refineries in Los Angeles and San Francisco have closed in the past six months, "which really drives that volatility for us having fuel maybe 20 cents a gallon more than everyone else," he said.
Alaska's 2024 acquisition of Hawaiian Airlines allowed the carrier access to "fuel from Singapore, and we pay less per gallon for Hawaii fuel getting tankered there than we do on the West Coast," he said.
The carrier has shifted where it sources its fuel, Minicucci added. Before the merger with Hawaiian Airlines, 65 percent of Alaska's fuel came from the West Coast. After the acquisition, it's 56 percent. "The initiative over the next two years is to take that reliance down to somewhere in the low- to mid-40s," he said.
As for the corporate segment, Minicucci said it is growing, and he credited the carrier's international expansion "bringing some of those business and corporate travelers that maybe we lost because we didn't have that international" option.
American Airlines
American now expects first-quarter revenue to increase by more than 10 percent year over year, compared with prior guidance of 7 percent to 10 percent, with "stronger-than-expected demand, driven by effective execution of the company's commercial initiatives and a solid demand backdrop," according to a Tuesday SEC filing. The carrier also expects Q1 average fuel costs to be $2.75 per gallon, compared with the $2.42 per gallon reported for Q4 2025.
"Our revenue performance is improving at a rate greater than we had originally anticipated," American president and CEO Robert Isom said at the conference. "Eight of our top 10 days of revenue booking, eight of our top 10 revenue weeks in our company history have been in this quarter."
Still, Isom also noted that since American's fourth-quarter earnings call in late January, increasing fuel prices have had "about $400 million of impact in terms of our first-quarter expenses," he said, adding that if the rapid fuel increase is short-term in duration, it will affect profitability in the first quarter and likely the second quarter as well. If longer-term, "we know that there will be appropriate steps taken to ensure that we drive revenue performance to offset."
As for competition with United at Chicago O'Hare International Airport, Isom praised the Department of Transportation and the Federal Aviation Administration for "stepping in" and proposing operational caps for the summer.
"Where we were headed in Chicago due to the reckless scheduling of our competitor was going to be gridlock, plain and simple," Isom said. "American Airlines has had one intention, which is just getting back to a level of flying that we had done back in 2019. We added a modest amount of flying year over year. I'm really hopeful and confident that what the DOT and FAA are doing will be fair and will produce a schedule that ultimately all of our customers can benefit from."
Delta Air Lines
Delta also increased its first-quarter revenue guidance on Tuesday to a projected increase in the high-single-digit percentages year over year, compared with prior guidance of an increase of 5 percent to 7 percent.
Delta chief commercial officer Joe Esposito at the conference noted that Delta is seeing "incredibly strong demand right now," including in the short term for business and in the long term for both premium leisure and premium business. "We're seeing good strength all the way out to the summer," he said.
Regarding rising fuel costs, Esposito said that for international flights, "we can do fuel surcharges, and those have gone in historically in the past couple of weeks. You've also seen the base fares for domestic go up. I think those are moving at really good paces right now. There's an imperative for quite a bit of the industry to make money, so a lot of it is on the edge of a break-even to losing money. So, it's really imperative that those get passed through."
In response to an analyst question about the corporate segment, Bastian said, "We're No. 1 in corporate travel by a large margin in our industry. We track about 15 different industries. Every single industry we track is up double digits over prior year. Some of that was last year's comp. But many of these industry—financial services, aerospace and defense, media, technology—are up 20-plus percent on a year-over-year basis. So that is very, very healthy growth."
JetBlue
JetBlue on Tuesday also updated its first-quarter guidance, with revenue now projected to increase 5 percent to 7 percent year over year versus prior guidance of flat revenue to an increase of 4 percent, based on "demand strength for travel across both peak and non-peak periods broadly across the company's network," according to an SEC filing.
Capacity, however, now is estimated to decline 1 percent to 2 percent compared with Q1 2025. Previous guidance had it increasing 0.5 percent to 3.5 percent. The carrier also increased its fuel-cost outlook to $3.01 to $3.06 per gallon, compared with a prior estimate of $2.27 to $2.42 per gallon.
JetBlue CEO Joanna Geraghty at the conference talked about the carrier's upcoming domestic first-class product, which is slated to launch the second half of this year with about 20 percent of the carrier's non-Mint fleet including the new cabin to start.
"We'll be starting with the [Airbus] A320 fleet first, the 162-seat aircraft," Geraghty said. "Then in 2027, the vast majority of the domestic first product will be completed. Our premium exposure will go from 25 percent to 27 percent, but the seat count will remain relatively unchanged. We've also made the recent decision to move from not just two to three rows of first-class seats, but three to four rows of first-class seats, recognizing the increasing trend for the premium customer."
Southwest Airlines
Southwest CEO Bob Jordan at the conference affirmed the carrier's prior first-quarter outlook. Like other carriers, he touted the carrier's revenue strength this quarter, specifically in the "new initiatives and products that we're selling at Southwest," he said. "Everything that we told you about the initiatives and the program, what they would deliver and everything we told you at fourth-quarter earnings in January is fully on track."
Last year, the carrier added baggage fees and in January launched assigned seating and its extra-legroom seats.
Jordan added that Southwest is seeing "broad-based demand strength" in all geographies and across all fare structures, including business and leisure. The carrier also generated $1 billion in bag fees for the year and more than $1 billion in the "assigned seating product upsell and seat ancillaries," the extra revenue from which is "being optimized at a point where we are seeing high fuel [costs], and it certainly acts as a hedge for us," he said.
"What comes next is going to be on the product side. It's going to be continued network evolution," Jordan said. "We know the products are much more favorable to our business customers, but there's work to do to gain more business share."
On the corporate segment, "if we didn't sell $1 more of corporate travel, March would be our biggest corporate travel month in our history," Southwest COO Andrew Watterson said. That is "as of last Friday, and we still have half a month to go and corporate books close in."
"Corporate is really working for us," Watterson added. "We have the infrastructure. We have a sales force from the distribution channels, and we just have the product to go with it. Now our sales force arm with a better product is winning more business for us."
United Airlines
United CEO Scott Kirby at the conference noted that despite increasing airfares in the past few weeks to offset rising fuel prices, "the revenue environment is really strong," he said. "We have had the 10 biggest booking weeks of our history. [They] have been the first 10 weeks of the year … which is pretty remarkable. The last two have been the two biggest."
Like American, United expects about a $400 million headwind in the first quarter because of rising fuel prices, CFO Mike Leskinen said. "It shouldn't be a big surprise. We're having a lot of success passing [that] through price."
As for Chicago O'Hare caps, Kirby said that "DOT is, for the first time in my career, doing what they're supposed to do, which is manage schedules so that they equal the amount of capacity at the airport. I am highly confident that the DOT does not want to put their thumb on the scale either for United, unfortunately, or for American. … It's all going to be fine. It's going to work out better because the airport is going to be managed capacity there."