Visible Alpha breakdown of US airlines’ third-quarter earnings expectations

US airlines will kick off third quarter earnings season on Thursday, October 9, with Delta reporting first, followed by peers through to JetBlue on Tuesday, October 28. Visible Alpha’s consensus estimates highlight mixed expectations across key players in the industry, with analysts expecting moderate earnings as steady travel demand is offset by weaker pricing and costs.

Delta Air Lines Inc. (NYSE: DAL) and United Airlines Holdings Inc. (NASDAQ: UAL) are expected to deliver modest revenue growth of 2–3%, underpinned by higher capacity and resilient traffic. However, lower revenue per mile and rising unit costs are expected to pressure margins, with Delta’s EBITDAR expected to be up 8% but United’s down 12%.

American Airlines Group Inc. (NASDAQ: AAL) is expected to continue to lag peers, with revenue projected to slip 0.2% year-over-year and a net loss of $187 million, reflecting soft yields and elevated costs.

Low-cost carrier, Southwest Airlines Co. (NYSE: LUV) faces similar margin strain despite flat capacity, while Alaska Air Group Inc. (NYSE: ALK) is forecast to see a sharp 50% decline in earnings per share, even as revenue edges higher. JetBlue Airways Corp. (NASDAQ: JBLU) remains in the red, with analysts expecting another quarterly loss amid pricing pressure and capacity discipline.

Overall, profit growth is expected to be constrained by cost inflation and weaker pricing power, suggesting limited earnings momentum, even as travel volumes remain robust.

Capacity and traffic expectations for Q3 2025 indicate that airlines are maintaining robust passenger volumes, with total revenue passenger miles (RPM) across major carriers projected at 278.8 billion, up from 273.7 billion in Q3 2024, while total available seat miles (ASM) are expected to rise to 328.9 billion from 319.9 billion a year ago.

Network carriers such as Delta (ASM +3.1%, RPM +2.2%) and United (ASM +6.1%, RPM +5.7%) are expected to lead capacity growth, whereas low-cost carriers like Southwest and JetBlue show more modest expansions.

The overall load factor remains high at 84.6%, although slightly below last year’s 85.4%, reflecting strong but slightly less efficient seat utilization.

Looking at the revenue and pricing expectations for Q3 2025, total passenger revenue across major airlines is projected at $51.6 billion, up from $51.1 billion in Q3 2024, while total revenue is estimated at $57.9 billion, a marginal increase from $57.1 billion a year ago. Despite higher traffic levels, revenue per available seat mile (RASM) is expected to fall across most carriers, reflecting weaker pricing power. These declines indicate that while capacity and traffic remain robust, airlines are experiencing pressure on unit revenues, suggesting competitive pricing in domestic and leisure markets.

Cost and efficiency metrics show a mixed environment in Q3 2025, with rising employee expenses and fuel costs contributing to pressure on margins, even as capacity and traffic remain robust.

Total employee costs across major carriers are projected to rise, reflecting higher wages, staffing needs, and ongoing labor agreements. In contrast, fuel costs are moderating compared with Q3 2024, aided by softer crude prices. The decline is also partially cushioned by hedging strategies at carriers, which moderate exposure to market swings. When normalized for capacity, cost per ASM excluding fuel remains relatively steady at 12.69¢, slightly above last year’s 12.36¢, indicating that operational efficiency gains are being offset by cost inflation.

Meanwhile, total costs and expenses excluding fuel are projected to rise 6% YOY to $43.6 billion in Q3 2025, highlighting cost pressures from labor, maintenance, and infrastructure upgrades.

Net income across major carriers is projected to decline compared to Q3 2024, while EBITDAR is expected to decrease across all airlines, with Delta Airlines being the only exception. Meanwhile, diluted EPS is expected to moderate across the board, signaling that earnings growth is constrained by rising labor and fuel costs, as well as competitive pricing pressures.

Overall, US airlines are poised for moderate earnings, with expectations for Q3 2025 looking considerably weaker than Q3 2024. While passenger demand and travel volumes remain robust—supported by sustained leisure travel and steady corporate bookings—the industry continues to grapple with margin pressures. Substantially higher employee costs are expected to weigh on profitability, offsetting the benefits of stable capacity and disciplined pricing.

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