American Airlines Withdraws 2025 Forecast Amid Travel Demand Concerns Linked to Trump Tariffs
American Airlines has announced the withdrawal of its 2025 financial forecast, citing a significant decline in domestic travel demand and growing economic uncertainties attributed to President Donald Trump's recent tariff implementations.
Forbes
The airline reported a net loss of $473 million for the first quarter of 2025, surpassing the $312 million loss recorded in the same period the previous year. Despite the adjusted per-share loss of 59 cents being better than analysts' expectations of 70 cents, revenue dipped slightly by 0.2% to $12.55 billion.
CEO Robert Isom highlighted a sharp drop in domestic leisure travel beginning in February, attributing it to consumer fears of a recession and rising prices due to the administration's tariffs. The situation is further compounded by a 5% decrease in international visitors to the U.S., potentially linked to negative sentiments about U.S. trade policies.
Investopedia
Other major U.S. airlines, including Delta, Southwest, and Alaska Airlines, have also retracted their 2025 projections, reflecting industry-wide caution amid macroeconomic instability. These carriers have noted similar declines in domestic travel demand and are adjusting their capacity growth plans accordingly.
AP News
Investopedia
The broader travel industry is feeling the ripple effects of the tariffs, with companies like Procter & Gamble and PepsiCo raising prices and cutting profit forecasts. Investor confidence has been shaken, and consumer behaviors are shifting, as evidenced by reduced dining and demand for hygiene products.
Travel Noire
As the airline industry navigates these challenges, American Airlines and its peers are focusing on strategic adjustments to mitigate the impact of economic uncertainties and changing consumer behaviors.
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