Is a recession gesturing in row 33?
The CEO of the airline warned this month to Wall Street that the appetite of passengers for national trips is becoming lighter than they expected when they established high forecasts in early 2025.
In a series of earnings, they said that the reasons range from the whipsy tariff policies of President Donald Trump to the volatile markets and, above all, the economic uncertainty.
“No one really enjoys uncertainty when they are talking about what they could do on a vacation and spend dollars earned with so much effort.” American Airlines CEO Robert Isom said in a quarterly gain call on Thursday.
That means that airlines have too many seats in their hands, again. Delta airlines, Southwest Airlines and United Airlines He said they will reduce their capacity growth plans after what they still expect to be a strong summer travel season.
Delta, southwest, Alaska airlines And American Airlines achieved its 2025 financial prospects this month, saying that the US economy is too difficult to predict at this time. United Airlines He provided two perspectives, one if the United States falls into a recession and said he hopes to be profitable in any scenario.
That is leading to cheaper plane tickets. The air rate fell 5.3% in March last year, according to the last of the Labor Office’s Labor Statistics data. Easter, a maximum travel period that coincides with many school vacations, fell in March last year, although the rates also fell 4% in February this year.
In addition to the pressure, executives said, it is a slower growth than expected of corporate trips, which faces the same challenges that many homes are. Government trips also sank in the middle of the cost cuts of the Trump administration and mass layoffs this year.
“If uncertainty appears, the first thing that disappears is corporate trips,” said Conor Cunningham, a travel analyst and transport of Melius Research.
The Delta CEO, Ed Bastian, said on April 9 that corporate trips had a 10% year after year at the beginning of 2025, but that growth has been flattened since then.
Business trips are key to the main operators because these customers are less sensitive to prices and often reserve the last minute when tickets are likely to be more expensive.
The cantilever of the seats in the national skies is forcing airlines to reduce prices to fill their planes.
Alaska airlines He warned on Wednesday that the weakest demand of the expected will probably become profits of the second quarter. Financial director Shane Tackett told CNBC that the demand has not sunk, but the carrier has dropped some rates to fill the seats.
“The rates are not as strong as they were in the fourth quarter of last year and arrived in January and the first part of February,” Tackett said in an interview on Wednesday. “The demand is still quite high for the industry, but it is not at the top that we all anticipate that it could continue last year.”
At the front of the plane, executives say that demand remains much better, while customers based in the US are still flying abroad in mass.
But persistent concerns still weigh on the industry.
“The certainty will restore the economy, and I think it will restore it quite fast,” Isom said.
