From Yahoo Finance: 2025-04-17 12:38:00

President Trump’s trade war is causing uncertainty for U.S. airlines similar to the COVID pandemic. Carriers are struggling to forecast business due to unclear consumer behavior. Delta and Frontier have withdrawn full-year outlooks, while United offered two different earnings forecasts. Economists predict a significant slowdown in the U.S. economy and a 45% chance of recession due to tariff policies.

Airlines are preparing for potential revenue cuts by implementing capacity cuts and cost management strategies. The industry believes the uncertainty is self-inflicted and could vanish if tariffs were lifted. Unlike the pandemic, travel demand has softened but could bounce back if the economy improves. U.S. domestic travel is currently the weakest market, with airlines lowering fares to stimulate demand.

United expects negative domestic unit revenue this quarter but plans to balance market share and financial returns. Mixed economic indicators complicate the situation, with strong retail sales and hiring but plummeting confidence levels. Despite lower travel demand from lower-income households, affluent customers are still traveling, supporting premium cabin revenue for airlines. Concerns remain about further economic deterioration impacting bookings and revenue streams.



Read more at Yahoo Finance: US airlines struggle to forecast their business in worsening economic fog