While I was gone on vacation, the first quarter DB1B data came out from government, so we can finally get a more granular look at what happened to the industry’s revenue at the beginning of this year. Overall, it was not good. But there were brightspots like Southwest and even Frontier. On the flip side? Avelo had the worst performance by far.
Let’s start by remembering that this is domestic data only. It would look different if we were talking about international here since we know that premium cabin demand on long-haul has held up better. Domestic has been the problem child this year, and it’s especially true in coach. With that in mind, let’s take a look at the numbers.
Q1 2025 Unit Revenue and Seat Capacity % Change by Airline
Data via Cirium, Unit Revenue adjusted to 1,000 miles
Let’s start at the top, shall we? Yes, that’s Southwest turning in an impressive performance. Sure, capacity was down which helps to boost unit revenue, but the airline’s yield was actually up more than 10 percent. It filled fewer seats with fares that high, but it still came out well ahead.
Keep in mind that for Southwest, none of the new revenue initiatives like extra legroom and assigned seating have gone into place. There’s also no baggage fee here. (Those would show as ancillaries anyway.) This is just good old-fashioned work to better manage fares and availability. I’m going to say that Southwest took its eye off the ball for awhile here, but it is now fixing things quickly. That is a strong result for the airline.
I looked in greater detail, and there were some surprises. In top markets, Denver lead the way with nearly a 6 percent increase. BWI was the only one that dropped in that top tier.
But the big gainers? Nashville came in with an impressive 10.7 percent jump despite a 7 percent increase in capacity. You can see why Southwest decided this was a better place to be than Atlanta. Orlando unit revenue was up a stunning 13.4 percent as the ULCCs pulled back. Austin was up 11.5 percent, but that’s because American walked away from its focus city.
Also doing well this quarter was Frontier. It saw unit revenue grow by just over 2 percent. That doesn’t sound impressive until you realize that it had seats spike more than 13 percent. That’s a lot of capacity for unit revenue to still be up. Then again, Frontier has had its problems before this, so it was an easier year-over-year comparison than non-ULCCs.
Alaska also turned in a strong performance with a slight uptick on unit revenue despite the big increase in capacity. Just note that this does not include Hawaiian. I thought that would be too much noise.
You may be surprised to see Spirit in the middle of the pack, but you shouldn’t be. After all, look at how much smaller the airline is with double digit decreases in seats. To see unit revenue be flat on such a big decline? That is very bad news.
After Spirit, we get into negative territory, but the big three are all in pretty decent position. American had the least growth so its unit revenue dropped the least. These all look to be within a range.
But below that, this is where it gets ugly.
You might think that Breeze’s 6.3 percent drop in unit revenue would scare me, but consider that the airline added nearly 50 percent more seats? That’s actually not a terrible result considering how many seats were added. I dug further on a route level and saw that on routes that flew in both years had an average fare decline of four percent. That’s not ideal, but it’s not catastrophic.
If we want to talk about catastrophic, it’s the two airlines at the bottom of the list. I’ll admit that Allegiant few under the radar for me, but this was a massive decline. Florida led the way with Punta Gorda down 25 percent, St Pete down more than 27 percent, and Sarasota off 29 percent. That’s… that’s pretty terrible.
But nothing is quite as terrible as Avelo which after having an 18.4 percent increase in capacity saw fare revenue just disappear, down nearly 28 percent. In returning markets, Avelo’s average fare was off by 24 percent. Fares were just so bad, yet load factor ticked up only one point to 72 percent.
I’ve already written about Avelo’s struggles as it closed the Santa Rosa base while pulling two other airplanes from the East Coast to do immigration charter work on behalf of the US government. But now, Avelo is pulling out of the West Coast entirely before the end of the year. This is not good news for the airline.
Q1 was an interesting quarter since it had such divergent performance across various airlines.
Edited 7/15 to add JetBlue to the chart
