Several Major US Airlines Report Decline in Profit Forecast

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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