A recession isn’t coming after all — it’s already here, according to at least one airline CEO.
Southwest Airlines (LUV-1.85%) CEO Bob Jordan told Bloomberg that demand has cratered in recent months, with domestic leisure travel dropping more than he’s ever seen besides the Covid-19 pandemic. The executive expects Southwest’s second-quarter revenue to fall by six percentage points after it declined by three points in the first quarter.
“I don’t care if you call it a recession or not, in this industry that’s a recession,” the CEO told Bloomberg.
Southwest is more reliant on domestic leisure travel than other airlines, like Delta (DAL-1.15%), that get a significant portion of their revenue from business travel. Because of this, Southwest is more vulnerable to changes in consumers’ willingness to shell out money for travel.
“When consumers are uncertain, they pull back,” Jordan said. “Consumers can immediately stop spending.”
