Turbulence Ahead: Are Airlines Nosediving into a Recession?

Row 33 Blues: Trouble in the Skies

Alright folks listen up. Word on the street or rather at 30,000 feet is that the airlines are feeling a little… airsick. CEOs are squawking about softer than expected domestic travel. Apparently people are tightening their purse strings faster than a hedge fund manager during a market crash. They blame Trump's tariff tango market volatility and good old fashioned economic jitters. As American Airlines CEO Robert Isom said 'Nobody really relishes uncertainty when they're talking about what they could do on a vacation and spend hard earned dollars.' I wouldn't either especially when you can put those dollars into a sure thing... like Axe Capital.

Too Many Seats Not Enough Asses

So the airlines find themselves with a surplus of seats. Sounds like a buyer's market right? Delta Southwest and United are all scaling back their growth plans. Remember what Sun Tzu said: 'He will win who knowing the enemy and knowing himself need not fear the result of a hundred battles.' These guys should have seen this coming. It's not about winning it's about *not* losing something these CEOs seem to be forgetting. Next thing you know they will be asking for a bailout.

Outlook? More Like Out to Lunch

Delta Southwest Alaska and American have all pulled their 2025 financial outlooks. Pulling outlooks? Sounds like someone is afraid to show their cards. United bless their optimistic hearts offered two outlooks: one with a recession one without. Either way they expect to be profitable. Reminds me of that time I shorted Ice Juice no matter what happened I was going to make bank. You gotta love optionality.

Cheap Flights? Don't Get Too Excited

Airfare is down 5.3% year over year. That's a win for the little guy I guess. But don't think you're getting away with anything. The airlines will find a way to nickel and dime you. Bag fees seat selection the privilege of breathing – it all adds up. As I always say 'What's the point of having fuck you money if you can't say fuck you?' But in this case the airlines are saying it to their shareholders. They just can't fill those seats...

Corporate Travel: Grounded

Corporate travel is tanking faster than a bad IPO. Government travel too. Trump's cost cuts? Mass layoffs? Sounds like someone is trying to run a business like I run Axe Capital. Cut the fat and squeeze every last drop. But travel analyst Conor Cunningham put it best: 'If uncertainty pops up the first thing that goes away is corporate travel.' Makes sense. Why fly your team to some boring conference when they can Zoom in their pajamas? Time to short Zoom.

First Class Still Flying High... For Now

The front of the plane is doing just fine thank you very much. International travel is booming. The big boys will always be in demand and will always be willing to pay to ride in the pointy end. But for how long? As for the rest of the industry: "Certainty will restore the economy and I think it will restore it pretty quickly," Isom said. Well that's one way to put it... I prefer to create my own certainty... and profit from everyone else's uncertainty.