1142 ET - Airlines have already responded to timid demand in recent months with capacity cuts, so their performances in the back half of the year will depend on consumers' travel behavior, Morgan Stanley analysts say in a research note. Management teams have already made it clear recently that domestic travel revenue is still challenging, the analysts say. Most of the industry would like to see more capacity come out, they say. While there could be some more rationalization in 4Q, 3Q is probably baked in, the analysts say. Tax cuts, interest-rate cuts and some inflation relief could get consumers traveling again and deliver a stronger demand-supply environment, the analysts say. (dean.seal@wsj.com)

(END) Dow Jones Newswires

July 07, 2025 11:42 ET (15:42 GMT)

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