Leading airlines in the United States are scaling back their flight plans and adjusting their profit projections due to a decline in domestic travel demand, as concerns over both the national and global economies grow. American Airlines announced on Thursday that it is withdrawing its financial guidance for 2025, echoing the actions of fellow airlines Southwest and Delta, which have cited economic uncertainty as a reason for not providing comprehensive yearly forecasts. These airlines have noted a decrease in sales among economy class leisure passengers.
American Airlines CEO Robert Isom remarked on the situation, stating, “We concluded a robust fourth quarter, entered January with good business, but domestic leisure travel notably decreased as we transitioned into February.” This shift in consumer behavior aligns with survey findings indicating widespread fear of an impending recession and apprehension over President Donald Trump’s uncoordinated trade tariffs raising costs.
International travel concerns are also mounting. J.P. Morgan’s chief U.S. economist, Michael Feroli, highlighted in a client memo that negative sentiment towards America might be leading to fewer international travelers, with data indicating a 5% annual decline in visitors. “Recent stories indicate tourists canceling U.S. trips in response to heavy-handed trade policies, suggesting another angle to evaluate tariffs’ impact on economic activities,” Feroli noted.
Economic indicators point towards a slowdown, evidenced by decreased sales of previously owned U.S. homes in March and a continual drop in U.S. consumer confidence, marking its fourth monthly decline in April. Despite these signals, there haven’t been significant layoffs yet.
President Trump’s announcement of blanket tariffs on April 2 sent financial markets into turmoil, stirring recession fears and prompting consumers and businesses to retract spending, including travel. In response, Trump briefly paused new import taxes for 90 days yet increased existing tariffs against China. China retaliated by hiking its import tax on U.S. goods to 125%, while on Thursday, it refuted Trump’s claims of ongoing negotiations to de-escalate their trade war.
American Airlines plans to reassess its annual guidance once the economic outlook becomes more discernible, noting stable sales in business travel and premium long-distance international flights. Southwest Airlines announced on Wednesday its intention to reduce its flight schedule for the year’s second half because of diminished demand. The airline also hesitated to reaffirm its projected financial outlooks for 2025 and 2026, citing economic uncertainties.
Last week, United Airlines presented dual financial forecasts contingent on potential recession developments, announcing plans to lessen its domestic flight schedule by 4% starting in July, responding to the scant demand for economy tickets. “We see a fair chance of further weakening,” said United CEO Scott Kirby.
Delta Air Lines, which had projected an exceptionally profitable year as recently as January, revised its expectations for 2025 and deferred planned expansions to its flight schedule earlier this month. Delta CEO Ed Bastian explained, “With widespread economic unpredictability due to global trade, growth has largely slowed. In this environment, we’re focusing on protecting margins and cash flow, managing what we can control, and reducing planned capacity growth for the year’s second half.”
Furthermore, the parent companies of Frontier Airlines and Alaska Airlines have also rescinded their 2025 guidance, reflecting the broader aviation industry’s cautious stance amidst prevailing economic ambiguities.