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yesterday

U.S. Airlines Slash Forecasts as Travel Demand Weakens, Airfares Drop

Economic uncertainty tied to tariffs and volatile markets forces carriers to cut capacity, slow hiring, and lower ticket prices.

Passengers arrive at the American Airlines terminal at San Francisco International Airport on April 24, 2025 in San Francisco.
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Southwest Airlines Cutting Flights Due to Economic Uncertainty

Overview

  • Major U.S. airlines, including Delta, American, and Southwest, have withdrawn their 2025 financial outlooks due to unpredictable economic conditions driven by tariff policies.
  • Airfare prices fell 5.3% in March 2025 year-over-year, following a 4% drop in February, reflecting weaker demand and excess capacity.
  • Domestic leisure travel, a key revenue stream for airlines, has significantly declined as price-sensitive travelers reduce spending.
  • International inbound travel to the U.S. dropped 10% in March compared to the previous year, marking the steepest decline since the COVID-19 pandemic.
  • Airlines are responding by scaling back capacity growth, slowing hiring plans, and adjusting fares to fill seats during a period of economic volatility.