Four major US carriers have adjusted their expectations for 2025, citing softer demand for domestic air travel and lower consumer confidence due to economic uncertainty. Delta Air Lines reduced its first-quarter projections by 40-50 cents a share, American Airlines expects to lose between 60-80 cents a share in Q1 2025, while Southwest Airlines cut its guidance on Revenue Per Seat Mile by 3%. JetBlue Airways also adjusted its forecast downward, predicting a minimum loss of 4%.
The Dow Jones U.S. Airline Index fell roughly 6% before markets opened Tuesday. Economists warn that the risk of a recession is rising due to President Trump’s trade policies, which may have contributed to the carriers’ reduced outlooks.
A decline in demand for domestic air travel can be an indicator of a weakening economy. Delta CEO Ed Bastian noted a “significant shift” in GDP sentiment and a decrease in consumer confidence signals. The airline industry is closely correlated with GDP, suggesting that any economic downturn could impact air travel demand.
Historically, lower demand has led to more affordable airfares, promotions, and special offers. However, the current uncertainty may have different implications for travelers. As economists monitor the situation, it remains to be seen how this will affect air travel prices and industry performance in 2025.
Source: https://www.forbes.com/sites/suzannerowankelleher/2025/03/11/airlines-cut-forecasts-consumer-confidence-economic-uncertainty