Shares of American Airlines and Southwest Airlines both dropped sharply Thursday, after the carriers reported slack second-quarter demand for travel and potential weakness in the economy impacting the second half of the year.

Southwest Airlines' busy second quarter included a slew of key initiatives, but it was a lackluster one for shareholders.

Dallas-based Southwest Airlines is on target to reach its financial goals after it reported higher-than-expected revenues from checked bags.

While Southwest’s profit and revenue fell, the airline noted that domestic leisure demand was starting to stabilize.

Southwest Airlines' CEO told investors in a July 24 earnings call that the airline could eventually open its own lounges.

Going forward, even more changes are on the horizon. On Thursday, Southwest shared a revamp to its Rapid Rewards Credit Cards. Those adjustments involve new perks that are effective immediately, but come with a cost. Each of the five credit cards will have a spike in annual fees .

(Reuters) -Southwest Airlines missed Wall Street estimates for second-quarter profit on Wednesday, pressured by weak domestic travel demand that has led to more empty seats and softer fares. Shares of the carrier were down 2% in aftermarket trading.

Southwest said unit revenue for the current quarter could fall as much as 2% over last year and nonfuel costs could rise as much as 13%, with higher expenses weighing on the airli