Major U.S. airlines are reducing their flight schedules and revising or withdrawing their profit outlooks for the year due to less domestic travel demand as sentiment about the national and global economies sours. American, Southwest and Delta all cited weakening sales among economy class leisure travellers in declaring the economic outlook too uncertain to provide full-year forecasts.
“We came off a strong fourth quarter, saw decent business in January, and really domestic leisure travel fell off considerably as we went into the February time frame,” American Airlines CEO Robert Isom told CNBC.
Consumer reluctance to book vacations would correspond with a new poll that showed many people fear the U.S. is being steered into a recession and that President Donald Trump’s broad and haphazardly enforced tariffs will cause prices to rise.
There’s also increasing concerns about international travellers.
Michael Feroli, chief U.S. economist at J.P. Morgan, said in a client note that anti-American sentiment could be spurring a travel drop-off, with data showing that international visitors to the U.S. are running about 5% lower than a year ago.
“In recent weeks there have been numerous news stories about tourists cancelling trips to the U.S. in protest of the perceived heavy-handedness of recent trade policies,” he wrote. “This points to potentially another channel to consider in assessing the effects of tariffs on economic activity.”
Some economic indicators point to expectations of a slowdown. Sales of previously occupied U.S. homes slowed in March, and U.S. consumer sentiment plunged in April, the fourth consecutive month of declines.
American Airlines said it would give an update on its full-year guidance “as the economic outlook becomes clearer.” Airline executives said sales among business travellers and for premium seats on long-haul international flights remained solid.
Southwest Airlines reported last week that it would trim its flight schedule for the second half of the year due to lower demand.
And United Airlines said it planned to reduce its scheduled domestic flights by 4% starting in July in response to lower-than-expected demand for economy fare tickets.
“We think there is a reasonable chance things can weaken from here,” United CEO Scott Kirby said.
Delta Air Lines, the nation’s most profitable carrier, predicted as recently as January that the company was on track for the best financial year in its history. Earlier this month, the airline scratched its performance expectations for 2025 and said it was putting a planned flight schedule expansion on hold.
The parent companies of Frontier Airlines and Alaska Airlines also pulled their 2025 guidance.
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