Major US airlines are reducing flights and withdrawing financial guidance due to declining domestic travel demand. American Airlines, Southwest, and Delta have all cited weakening sales among economy class leisure travelers as the reason for their actions.
Weakening economic sentiment has led to a decline in consumer confidence, with many people fearing a recession and price increases caused by President Trump’s tariffs. This fear is also affecting international travel, with data showing a 5% decrease in visitors from other countries compared to last year.
Airlines are taking steps to reduce costs and protect margins. American Airlines has withdrawn its financial guidance for 2025, while Southwest has trimmed its flight schedule for the second half of the year due to lower demand. Delta has also reduced planned capacity growth and put a planned expansion on hold.
The decline in travel demand is attributed to consumer reluctance to book vacations, as well as increasing concerns about international travelers. The US economy has seen slowdown indicators, including slower home sales and declining consumer sentiment, but fears of a downturn have not led to layoffs.
Airlines are cautiously optimistic, with some predicting a reasonable chance that the economic situation can stabilize from here. However, the uncertainty surrounding global trade and tariffs is making it difficult for companies to provide accurate financial guidance.
Source: https://apnews.com/article/tariffs-travel-airlines-southwest-american-delta-0af04fdc6ac924cb510ed2538a301769