Despite several fare increases the past few months amid elevated fuel prices, air demand has remained steady, U.S. airline executives said last week at an industry analyst conference.
Southwest Airlines CEO Bob Jordan said that carriers have increased fares seven times since Feb. 1, and Southwest has participated in each. "That's the most that I could remember in my 38 years in the industry, but with fares up that much, there's been no drop off in demand at all," he said.
Still, Jordan added that the company still needs further increases to fully cover the rise in fuel costs.
On the corporate side, Southwest's March business revenue was up 25 percent year over year, and "that trend has sustained itself in April and May, which is a great sign," Jordan noted. He claimed that the carrier is adding market share, "particularly in our business customers because now we're offering them things that they want," referring to Southwest's new assigned seating and extra-legroom options.
Another feature Jordan said Southwest customers want is long-haul destinations. The carrier is considering that as well as the intention to add airport lounges, as noted in a third-quarter 2025 earnings call. Jordan also mentioned there could be "a credit card that goes with that and more premium and more destinations."
"We don't have to become Delta, United, American, but a handful of destinations, eight to 10 to 12, pick off the vast majority of the traffic, the vast majority of the places that our customers want to go," Jordan said. "Baltimore would be a natural popping-off point."
American Airlines CEO Robert Isom at the conference said that first-quarter managed corporate revenue was up 13 percent year over year. He added that even though the company's revenue and share of the corporate segment has recovered since the carrier's distribution pivot two years ago, overall managed corporate volume remains still 20 percent lower than it was pre-pandemic.
"But yields that we've seen on that business more than make up for it," Isom said. "There's much, much more upside. And the things that we have been able to do is to get out there with the [travel management companies]. And initially, we'd set up some shorter-term contracts. We had to rebuild some and regain some trust. We've done that, fortunately. Now what we're seeing is just incredible demand for American to be out there and willingness to negotiate contracts that are longer-term in length that come with, quite frankly, greater share commitments."
Still, Isom added that prior to the pandemic, the volume split between business and premium leisure was close to 50-50. "Now, premium leisure is more like 65 percent," he said.
Isom also noted a K-shaped aspect to overall demand, with strong domestic bookings. "No matter what end of the spectrum you're at, people want to travel," he said.
Meanwhile, JetBlue, which did not present at the conference, on Monday updated its second-quarter guidance, calling demand "strong and consistent with trends observed earlier in the year, with healthy demand across the booking curve, supported by strength for close-in travel," according to a U.S. Securities and Exchange Commission filing.
The carrier now projects second-quarter capacity to increase 2 percent to 4 percent year over year, compared with earlier projections of 1.5 percent to 4.5 percent. Revenue per available seat mile now is projected to be up 9 percent to 12 percent year over year, compared with a prior projected increase of 7 percent to 11 percent.
JetBlue also is "encouraged" that the current trends may carry forward, and despite rising fuel prices, the carrier now expects to recapture 40 percent of increased fuel costs in the second quarter. JetBlue now anticipates fuel costs in the second quarter to be $4.26 to $4.36 per gallon, versus prior guidance of $4.13 to $4.28 per gallon.