American Airlines and Southwest Airlines are both scaling back their full year outlook, blaming economic uncertainty, inflation and trade disruptions for a slump in bookings.

Recent earnings reports from U.S. airlines reveal a split in travel outlooks. United and Delta have expressed optimism, citing accelerating demand, particularly in premium cabins, while Southwest and American have issued more cautious forecasts. The gap between premium and main cabin pricing remains significant, affecting airlines differently based on their service offerings.

Southwest has faced setbacks, including a reduction in earnings guidance and increased leverage, while American continues to address issues with its corporate booking system. Initiatives such as introducing baggage fees and assigned seating are expected to impact future performance, but their effectiveness remains to be seen. United Airlines stands out with a positive rating, attributed to its strong premium services and international network.

U.S. airlines casting doubt on travel outlook

So A.L. and L.U.V. both gave fairly bearish outlooks. The results were not very encouraging yet. United and Delta had given fairly bullish outlooks. How do you explain that divergence. I think what we're starting to hear from all the airlines is they're projecting a position of strength. United and Delta particularly said they saw a change in demand accelerating in July as people sort of got accommodated with tariffs and are moving on from the process. And we're seeing that really very apparent with premium cabin versus main cabin which we've seen for the last few quarters. But that Delta continues to exist. It's about a 10 point gap where premium pricing is up five. Main cabin is down five. So we're really seeing that hit airlines like Southwest which might not have as much of that or any of that to be frank. And then similarly American. So we also heard from Alaska Airlines that they see growing their premium revenue to more than 50 percent from the current 35 percent. When we talk about premium revenue is that corporate travel or is that premium economy. It's kind of hard to make the distinction between different airlines. It's differentiated depending on the airline. They all you know Southwest as an example has no premium but they're starting to assign seats and whether they'll segment that as premium it's yet to be determined. So they're going to start selling those next month and then have them start impacting EPS and 26 in terms of seat selection improving their offerings. In general we're seeing that trend across the board whether it's Alaska American with with its wide body revamp trying to add more premium seats because that's where the customer is more resilient. And Delta and United talked about that on their earnings calls where they're seeing an improvement in corporate. But 50 percent of Q3 bookings are still not in hand yet. So we have we still have a long way to go. And I think most are betting on July being the lowest revenue month and seeing a big acceleration in September as employees come back and start to travel. I remember a couple of quarters ago American had issues with its corporate travel partners. Is that something that's still dogging the company especially when it comes to American Airlines saying corporate travel demand seems to be flat while United and Delta see a pickup there. Simply what American did was had had they had several missteps of which their corporate booking system was one of them. So they essentially removed their corporate booking system from third parties and it resulted in finding that American flight on page 14 of your concur system. So you're unlikely to book it. They lost out on that revenue. They're saying they're going to get all one point six billion of that back by the end of this year. So they're on track for that essentially. For Southwest it cut its guidance after the second quarter's earnings miss and actually put a number a price on that fallout from tariffs up to one billion dollars. How do you break down that number or does this feel like a kitchen sink kind of forecast where you're putting everything in there. Southwest is seeing multiple issues. Essentially what it did was cut their EBIT guidance from one point seven billion to about 700 million. So about a billion dollar cut. And that includes some of their initiatives coming in which baggage fees those initiatives should be helpful to your EBIT. So contribute. So there's clearly seeing some competitive losses as customers might not want to fly it. And then the other big issue we have with Southwest right now is its balance sheet. It went from this company with a pristine balance sheet to net cash position to leverage of two point one times. They just did an accelerated two billion dollar buyback. The board has authorized another buyback. That's over two years. Is that a good use of its cash right now. Not necessarily because clearly your earnings are lower and you just increased from a net cash position to two times leverage which isn't great. So we don't like buybacks in general for companies because I think there could be uses of cash that are better but not for Southwest at two times leverage. Well Southwest is also being pressured by activist investors who might like that buyback. Does this get the active activist investors maybe off its back a little bit. It might. But we really need to see one demand improve for Southwest and to the initiatives actually come through bag fees and their assigned seating. So those initiatives are really going to be the driver. And that's what Bob Jordan is maintaining are going to be the driver of future earnings growth. So if you believe you could actually execute on those and cost savings initiatives then sure maybe your stock is worth your while. But you want to make sure you start executing on a bit. And we just started bag fees in May. So it's a little bit too early to buy back your stock unless you're uber confident. OK so single best idea in the airline space. United are only by rating. We only have one buy in defense one by an IT services one by an airlines. It makes it really easy for investors. United Airlines by by rating best premium offering best cost control best international network that's still holding on well.

Typhoon Co-May has left a trail of destruction across the Philippines, making landfall in the country's northwestern region. Torrential rains and strong winds have battered towns and cities, damaging homes, roads, and farmland. At least 25 people have been reported dead.

Pangasinan

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Israeli Prime Minister Benjamin Netanyahu and U.S. President Donald Trump appeared on Friday to abandon Gaza ceasefire negotiations with Palestinian militant group Hamas, a day after withdrawing their delegations from talks.

Jerusalem

Middle East Conflict

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Thailand and Cambodia exchanged heavy artillery fire for a second day on Friday (July 25) as their worst fighting in over a decade intensified and spread to new areas, despite international calls for a ceasefire.

Bangkok

Thailand, Cambodia exchange heavy artillery

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Ukraine Invasion

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Beijing

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London

Global Tariffs

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New York

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Israel issued a statement indicating that Prime Minister Benjamin Netanyahu has asked the Gaza negotiating team to return to Israel for ceasefire talks. CBS News' Ramy Inocencio reports.

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Los Angeles

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Istanbul

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Kyiv

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California

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A judge on Wednesday (July 23) sentenced Bryan Kohberger to four life sentences without the possibility of parole after he pleaded guilty to the murders of four University of Idaho students in 2022.

Breakdown