Fasten Your Seatbelts: Airlines Brace for Tariff Turbulence 

The “White Lotus” effect isn’t enough to make up for waning travel demand as tariffs rock the economy. 

Analysts say major airlines are expected to slash their profit outlooks even more than they already have when they report first-quarter earnings this month. First up: Delta reports tomorrow after cutting its growth outlook last month to a max of 5% from an earlier prediction of 6% to 8%. 

American and Southwest, which are expected to report later this month, also trimmed their performance forecasts last month. The airlines said that both business and leisure travelers have been skipping flights as fears of a recession and uncertainty around tariffs mount. 

Since then, the US has hit the global economy with tariffs of no less than 10% on everywhere from China to Heard Island (an uninhabited island near Antarctica whose main residents are penguins).

Airline stocks have nosedived: Delta, American, and United have each fallen 35% to 45% this year. And it’ll take more than a coffee and stroopwafel to pick them up. 

Scrapping the Summer Euro Trip

Post-pandemic revenge travel is coming to an abrupt end. When the world reopened circa 2022, airlines saw strong demand for international trips from wanderlusting travelers making up for lost time. Meanwhile, high-income jetsetters boosted airlines’ bottom lines by splurging on costly extras like roomier seats. 

While travel demand isn’t expected to fall back to pandemic levels, the industry’s worst-ever crisis, data firm Cirium already found online travel-agency bookings between the US and Europe are down 13% this summer compared with last year:

• Likewise, hotel company Accor (Sofitel, Fairmont) said EU bookings by Americans are down 25% for the summer. 
• It goes both ways: Tariff-rattled Canadians are canceling trips into the US, with analytics company UAG finding that flight bookings from Canada into the US have fallen 70%. 

Bumpy Ride: While tariffs and overall economic uncertainty aren’t likely to be as devastating to the travel sector as the pandemic was, they’re similarly hitting all types of travel. US travel seems to be falling both internationally and domestically, for both business and leisure travelers (not to mention government workers), and for both frugal and first-class fliers. It seems consumers can’t help but catch feelings (aka fear and doubt) instead of flights.