Holiday Travel Demand Looms As Big Question for US Airlines

US leisure and business travellers beaten down by economic uncertainty are waiting until the last minute to book air travel.

Many trips are being booked less than two weeks ahead of time — instead of the more typical one month or more. That is making it tough for airlines to forecast the capacity they need, putting revenue and profits at risk if carriers misjudge demand.

US airlines have had a tough year already with Donald Trump's trade war eroding consumer optimism and cutting into travel demand.

 Flying has bounced back since June, but the lingering trend of late booking is undermining carriers’ ability to cash in on the busy upcoming holiday travel period.

American Airlines Group, JetBlue Airways Corp and Allegiant Airlines said in recent earnings conference calls that they have only booked 20% or less of revenue from seats that they expect to sell for the final three months of the year, which the carriers indicated was less than they would normally expect. Airlines don’t typically provide advanced bookings numbers unless asked specifically by analysts.

During an earnings’ call in July, JetBlue cited lower-than-normal advanced bookings as part of the reason it declined to provide a financial forecast for the period. Allegiant said it still had “a lot to go” on ticket sales for the fourth quarter, adding that passengers generally book about six weeks before travel, with holidays normally purchased further out.

“Listen to any travel company, they will tell you the booking window is shorter than it’s been in a long time,” said Conor Cunningham, a Melius Research analyst. “They don’t have any visibility.”

Passengers interviewed at New York’s John F. Kennedy International Airport and LaGuardia Airport said there were a variety of reasons to book flights closer to travel. Last-minute fare deals, unexpected life milestones and plans that don’t come together as expected can play a role. Some travellers book spontaneously for instant gratification, worrying about the cost later.

“I’d rather lay out less money at a time,” said Alan Adler, 70, who prefers to book one-way flights about 10 days out. Although he finds last-minute fare hikes frustrating, the Florida resident said the excitement of immediate travel and added flexibility offsets the cost.

“For the people who book nine months in advance, I might not be in the mood to go by then,” said Adler, who sells eye glasses.

Carriers were whipsawed when travel started to crater in February following headlines about trade wars, recession fears and aviation incidents, including a midair collision that killed 67 people. Demand stabilised in May at lower levels and then snapped back in early July with surprising strength, carriers said.

Delta Air Lines Inc. Chief Executive Officer Ed Bastian said earnings for the first nine months of 2025 will be about the same as in 2024, “not the growth we were planning for at the start of the year.”

Capacity expansion based on existing schedules is “still too high” and reductions are likely, said Savanthi Syth, a Raymond James analyst. “What we just don’t know, beyond demand, is what industry capacity looks like” in the final quarter. “It does definitely create a setup that’s a bit of a nail biter.”

Airlines that misjudge the market and add too many flights can later be forced to cut fares to lure more people aboard — hurting revenue and profit margins.

For now, it’s unclear if US airlines are headed in that direction. Data from more than 100 carriers show that booking patterns have remained relatively normal overall this year, according to Airlines Reporting Corp., which settles ticket sales between airlines and travel agencies. United hasn’t shared details about its fourth-quarter bookings or capacity, while American hasn’t finalised its flying plans for the period. Delta didn’t disclose capacity for the year’s last three months.

Those three airlines benefit from having large international route systems, since travellers tend to book much further out and at higher fares for overseas flights.

During economic uncertainty, travellers with less discretionary income “become a little more cautious, book a little bit later,” said Bryan Terry, global aviation leader for Deloitte. “Booking later is the reason some carriers are unable to provide greater forecasting capabilities into the fourth quarter.”

Southwest Airlines Co Chief Executive Officer Bob Jordan said last month that a return in sales volume starting in early July was an encouraging indicator of a broad-based recovery, but he couldn’t shake off some lingering concerns.

“My only caution is I’ve been in this business a long time and it’s hard to read a few weeks into a trend,” Jordan said in an interview. “I don’t have any less optimism than anybody else, I’m just always cautious.”

JetBlue President Marty St George blamed the short booking window and uncertainty for the inability to provide an outlook for the quarter. JetBlue itself will soon be “pretty aggressive” in trimming flying plans once the extent of demand lulls in the quarter become clearer, he said.

Current published flight schedules not yet finalised show fourth-quarter domestic capacity up about 3.4% from a year go, Syth said. That compares with her estimate for a 1.8% increase.

US carriers last year slowed fourth-quarter expansion in the domestic market to better match demand, allowing them to boost fares. The moves contributed to increased earnings and set the industry up for an expected strong start to 2025.