by Donald Wood
Last updated: 8:10 AM ET, Thu March 27, 2025
A new report indicates that the impact of international
tariffs and reduced government spending by United States President Donald Trump
and his administration have negatively impacted the country’s aviation
industry.
According to Reuters.com, fear across the travel industry
regarding plane safety, weak economic growth, and high inflation have forced
the top U.S. airlines to slash first-quarter profit forecasts, with the S&P
500 passenger airlines index being down about 15 percent this year.
Delta Air Lines and United Airlines reported that stocks
have fallen around 20 percent in 2025, while Frontier Airlines is down two
percent. To overcome the financial woes, American Airlines, Allegiant, Delta, Frontier,
JetBlue, and United have all reduced their April-June quarter capacity over the
last two weeks.
“Your first needs are food and shelter. And then, we're a
little bit down the list of expenditures,” Breeze Airways CEO David Neeleman
told Reuters. “If you don't have a job, you're not going to go buy an airline
ticket.”
If the demand for air travel doesn’t rebound during the
second quarter, aviation officials, including United CEO Scott Kirby, that
carriers will start to slash routes and frequencies by the second half of
August.
Recent data supports the report, as Airlines Reporting Corp
(ARC) announced last week that air tickets sold through U.S. travel agencies
fell eight percent in February compared to the 39 percent increase in January.
Information from the U.S. Transportation Security
Administration also found that annual growth in passenger traffic slowed to 0.7
percent in March from five percent in January.
"There's going to be some type of slowdown,"
Frontier CEO Barry Biffle told Reuters.
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