• Major airlines say premium cabins and international demand are key amid economic uncertainty.
• Budget carriers have historically lacked premium seats in favor of cheaper no-frills cabins.
• Frontier, Spirit, and Southwest are all deploying new premium strategies to generate more revenue.

Major airlines continue to prove the importance of premium cabins as budget carriers play catch-up.

First-quarter earnings from American Airlines, Delta Air Lines, and United Airlines showed slowed growth and planned capacity cuts amid economic uncertainty and diminishing demand. Less government travel and fewer US-bound tourists didn't help.

Only one carrier, United, offered any financial guidance for the rest of the year, and warned a recession could cut profits by a third.

One thing all major carriers reporting results so far can agree on is that premium and international demand are helping to keep things afloat, even as share prices crater. That's something budget carriers have only recently begun to invest heavily in.

Without first-class or business seats to offer flyers, Frontier Airlines, Spirit Airlines, and Southwest Airlines have fewer ways to compensate for decreased demand and capacity cuts.

"We anticipate softness in the domestic main cabin to continue," American CFO Devon May said in the airline's Thursday earnings call. "To partially offset this, we expect long-haul, international, and premium bookings to outperform year over year."

Delta and United said economy cabin travelers tend to be more price sensitive and may delay travel plans amid the downturn, while premium economy, business class, and first-class seats are a more resilient and significant portion of their revenue.

New premium strategies announced by a slew of budget airlines last year, like plusher seats and luxury amenities, could help generate more revenue in the long run, but installing them on planes will take time.

Mainline carriers are cashing in on premium demand

All three major carriers reported year-over-year premium revenue growth in their first-quarter earnings. American saw a 3% rise, Delta's was 7%, while United increased by 9.2%.

"I don't think we've ever had premium as a larger percent of our total revenues as we do right now," Delta president Glen Hauenstein said in the airline's April earnings call. "It's sitting very resilient."

Executives attributed this to affluent travelers still willing to pay for premium seats despite the economic environment, especially long-haul flights to Europe and Asia.

They said as much as 75% to 80% of their international revenue originates in the US, and bookings remain strong through the summer compared to the comparatively lower domestic demand.

On the other hand, low-cost airlines' historically all-economy airplanes do not have swanky first or business-class cabins and do not fly long-haul to popular international markets like London and Japan.

Budget carriers' limited revenue streams and lower profit margin offerings make it harder to account for their losses as they cut thousands of flights this year. Mainline flight reductions can be more easily offset.

Budget carriers want a piece of the premium pie

Frontier, Spirit, and Southwest started bucking their historically no-frills trend in 2024. These add-ons come at a cost and would help the budget carriers collect more revenue.

For example, Spirit revamped its premium "Big Front Seat" bundle with more perks like free snacks, alcohol, Wi-Fi, and priority check-in. Frontier added a "business-class-like" cabin where the middle seat is blocked.

Southwest plans to deploy new premium extra legroom and front row seats in 2026. It will also start charging for checked bags in May for the first time in its 50-year history, though loyalty and elite status holders will still keep the perk. Those investments likely won't show up until at least the third-quarter results, analysts said.

"There was a better way to maximize the revenue per square foot in the aircraft, which is the whole game here," Southwest CEO Bob Jordan said in Thursday's earnings call on adding premium seating.

Delta earned $5.4 billion in revenue from its economy seats and $4.7 billion from its premium cabins during the first quarter. That means its premium cabin revenue was equal to 88% of the economy class revenue despite taking up much less real estate inside the plane.

Those are the types of returns the low-cost airlines and their investors hope to get a taste of.

Expected second-quarter revenue from Delta and American ranges from down 2% to up 2%, while Southwest expects flat performance or a decrease of as much as 4% year-over-year.

Frontier's stock is down about 55% year to date, and Southwest is down 21%, outpacing the broader market. Both have pulled their full-year guidance.

Spirit shares will begin trading again on April 29 after the airline emerged from Chapter 11 bankruptcy in March.

• A tourism helicopter crashed in the Hudson River on Thursday, killing three adults and three children.
• A Siemens executive, his wife, and their three children were among the dead, a company spokesperson said.
• The NTSB said the aircraft was not equipped with any flight recorders and was on its eighth flight of the day.

The National Transportation Safety Board said on Saturday that the helicopter involved in a crash that killed six people in New York earlier this week was not equipped with any flight recorders and that the accident occurred during the aircraft's eighth flight of the day.

"No onboard video recorders or camera recorders have been recovered and none of the helicopter avionics onboard recorded information that could be used for the investigation," the NTSB said in an update.

It added that the helicopter had completed seven tour flights on the day of the crash and that its last "major" inspection took place on March 1.

A Siemens executive, his wife, their three children, and a pilot were killed when a tourism helicopter plummeted into the Hudson River near Manhattan on Thursday.

Agustín Escobar, 49, had been the global CEO of the rail unit for Siemens Mobility. His wife, Mercè Camprubí Montal, also worked for the company as the global commercialization manager for its energy division.

"We are deeply saddened by the tragic helicopter crash in which Agustin Escobar and his family lost their lives. Our heartfelt condolences go out to all their loved ones," a Siemens spokesperson said on Friday.

New York City Mayor Eric Adams told a press conference on Thursday night that four people were pronounced dead at the scene, and two were taken to the hospital where they later died.

The pilot, who has been identified as US Navy veteran Sean Johnson, was the other victim.

The Federal Aviation Administration said the helicopter involved was a Bell 206, and that the NTSB would lead the investigation.

The NTSB said on X that it was "launching a go-team" to investigate the crash.

Videos posted on social media appeared to show the helicopter's rotor disconnected from the rest of the aircraft, spinning mid-air as the cabin plunged into the water.

Officials said that it appeared the helicopter, which was operated by New York Helicopters Tour Company, had lost control.

In a statement Friday, New York Helicopter Tours said it was "profoundly saddened by the tragic accident and loss of life that occurred on April 10, 2025, involving one of our helicopters in the Hudson River."

"The safety and well-being of our passengers and crew has always been the cornerstone of our operations. Our immediate focus is supporting the families and their loved ones affected by this tragedy, as well as fully cooperating with the FAA and NTSB investigations," it continued.

The company did not immediately respond to a request for comment. Calls to the helicopter's registered owner, a Louisiana firm, were unanswered.

The NTSB said Saturday that the helicopter's main fuselage, the forward portion of the tail boom, the horizontal stabilizer finlets, and the vertical fin had been recovered, but that divers were continuing to search for the main rotor, main gear box, tail rotor, and a large section of the tail boom.

A recent spate of plane crashes has raised awareness of aviation safety.

The Hudson River sees heavy helicopter traffic between airports and tourist flights over landmarks such as the Statue of Liberty. Pilots are required to use specific corridors.

In 2018, five people died after a helicopter made an emergency landing in the East River and flipped upside down, trapping the passengers inside.

The following year a helicopter crash-landed on the roof of a skyscraper, killing the pilot.

• Automakers are responding to Trump's latest round of auto tariffs, announced Wednesday.
• Ford is offering customers an employee discount, while VW is adding an "import fee" to cars.
• Stellantis has shut down factories and will lay off 900 workers, while others may shift production to the US.

The Trump administration's fresh wave of tariffs sent shock waves through the automotive industry on Thursday.

Automakers have responded to the impending trade war in various ways, from offering discounts to shoppers who hope to avoid future price increases to adding import fees on vehicles built outside the US.

The "draconian" trade policies, as one Wall Street analyst called them, will also affect autoworkers, with Stellantis pausing production at two assembly plants in Mexico and Canada.

Wall Street believes the tariffs could cost the auto industry more than $80 billion and slash Detroit's Big Three's earnings by up to 60%, thanks to an additional $5,000 of input costs per vehicle.

Here's how the industry at large is responding:

Nissan is pausing US orders of some Mexico-built SUVs

On Thursday, Nissan said it would pause new US orders of two Infiniti SUVs, which are built in Mexico. The announcement came after President Donald Trump's auto tariffs went into effect.

Nissan will pause new Mexico-built orders for the Infiniti QX50 and QX55 SUVs for US sales, the Japanese carmaker said in a statement to Business Insider. The model will still be produced for other markets, and production of other US models in Mexico and Japan will continue.

Nissan also said it would keep two shifts of production of the Rogue SUV at its Smyrna, Tennessee plant, reversing a January plan to end one of the shifts later this month. This will keep "more localized volume in the US that is free of the new auto tariffs," Nissan said in the statement.

Ford offers employee discounts to all customers

Ford announced on Wednesday that it would make employee pricing available to consumers for the next two months.

"In times like these, talk is cheap. At Ford, we believe in action," Rob Kaffl, Ford's director of US sales and dealer operations, said in a press release.

The discount, which ends June 2, applies to all Ford and Lincoln models except Raptors, the 2025 Expedition and Navigator SUVs, and Super Duty trucks.

How much a consumer saves depends on the vehicle, but it could easily run into the thousands. The discount would be applied on top of any other deals or promotions a dealership is offering, the company said.

Ford declined to confirm whether the tariffs would lead to higher sticker prices.

A company spokesperson told Business Insider that it has a 74-day supply of vehicles in stock that haven't been affected by tariffs, compared to 50 days for GM and 24 days for Toyota. (Around 60 days of supply is considered healthy in a normal economic environment.)

Analysts say Ford is one of best best-positioned US automakers to weather the tariffs.

Stellantis paused work at two factories and laid off hundreds at others

Stellantis, which owns former Chrysler brands like Dodge, Jeep, and Ram, has paused production at its Windsor assembly plant in Canada and Toluca assembly plant in Mexico, a spokesperson said Thursday.

The Windsor plant, which makes Pacifica/Voyager minivans and Charger Daytona EV muscle cars, will be offline for two weeks. It plans to resume operations the week of April 21.

The Toluca plant, which builds Jeep Compass and Wagoneer S SUVs, will stop work for the rest of April.

The production stoppage at these two facilities resulted in the temporary layoffs of 900 workers from the company's powertrain and stamping plants in Michigan and Indiana, the spokesperon said.

VW tacks on a special fee for tariff-affected cars

The German automaker Volkswagen has confirmed it will add an "import fee" to the sticker prices of vehicles affected by the tariffs, a spokesperson said. The import fee will be added to the destination charge, which is tacked onto the price of a new car.

It's unclear how much the tariffs will affect the cost of new VW cars as no final pricing decisions have been made, the spokesperson said.

Its top-selling Atlas and Atlas Cross Sport midsize SUVs are made in Chattanooga, Tennessee. Its other top sellers — the Jetta sedan, the Taos SUV, and the Tiguan SUV — are all made in Puebla, Mexico.

Volvo and Mercedes plot production shifts

The CEO of Swedish brand Volvo Cars told Bloomberg on Thursday that the carmaker would look to build more vehicles at its South Carolina factory in response to the tariffs.

"We will have to increase the number of cars we build in the US, and surely move another model to that factory," said Håkan Samuelsson, who returned to Volvo as CEO on Monday.

Samuelsson said the company would "look closely" at which model it moves to the factory, which already builds the EX90 and Polestar 3 EVs. Volvo did not immediately respond to a request for comment from BI.

Mercedes-Benz also signaled that it was considering shifting production to the US. Production chief Jörg Burzer told reporters from multiple outlets that the German carmaker could start building another vehicle model in its Alabama factory.

Burzer said Mercedes was still "assessing" the impact of the tariffs but warned flexibility would be key. Bloomberg previously reported that the company was considering cutting sales of some of its least-expensive models from the US market because the tariffs would make them economically unfeasible.

A spokesperson for rival BMW told BI the luxury carmaker was also still "evaluating" the new levies but called on the US and Europe to reach a deal quickly to avoid further pain for consumers.