by Donald Wood
Last updated: 8:10 AM ET, Tue March 11, 2025
Several major airlines in the United States reduced their first-quarter
financial forecasts on Tuesday, causing concerns amongst investors about the possible
impact of a slowing economy on travel demand.
According to Reuters.com,
U.S. airline stocks fell sharply in premarket trading on Tuesday after American,
Delta, Southwest, and United reported declining profit forecasts.
American reported a seven percent decline in its first-quarter
profit forecast, while Delta’s dropped 11 percent, Southwest’s fell by three
percent and United’s was down eight percent.
Some of the concerns that have resulted in the airline
industry’s forecasted decline include U.S. President Donald Trump's tariffs, a
broad market selloff on Monday, a potential federal government shutdown, and
the possibility of a recession.
The economic concerns are causing travelers to reduce
discretionary spending, which could result in increased caution when planning
trips. Just a few months ago, carriers reported strong travel demand and high
pricing across their networks.
“Concerns about U.S. consumer strength, possible DOGE
impacts on governmental air travel demand and Federal Aviation Administration
(FAA) staffing, US government tariff uncertainties and several high-profile
aviation incidents across North America have all occurred since late January,” Citi
analyst Stephen Trent told Reuters.
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