The airline industry is bracing for severe turbulence as the escalating global trade war over President Trump’s tariffs threatens to upend travel demand.
Major US carriers are expected to cut their 2025 outlooks when they begin reporting earnings in the coming weeks — and a few already have sounded the alarm.
Last month, Delta Airlines slashed its first quarter revenue and profit guidance for the year citing decreased “consumer and corporate confidence.” American Airlines and Southwest Airlines also cut their first-half outlook.
The long-threatened tariffs, which have led to the worst stock market sell-off since 2020, have put the brakes on trips between the US and Europe, according to booking data.
Overseas bookings during the usually busy summer period between June and August are down 13% compared to last year as of March 31, aviation data firm Cirium reported.
Likewise, hoteliers are seeing softening demand for travel to the US.
“Bookings from Europe to America are minus 25% for the summer – it’s minus 18% over the last 90 days. I attribute it to people deciding to go to Canada or to South America or Egypt,” Accor CEO Sebastian Bazin, Accor told Bloomberg TV last week.
Accor is the largest hospitality company in Europe and operates such brands as Sofitel, Novotel and Fairmont, as well as dozens of other brands.
Meanwhile, Canadians are canceling trips the US en masse as they express outrage over the escalating trade war.
Canadians are the top source of international travel to the US.
Last month, Air Canada reduced flights to Florida, Las Vegas and Arizona by 10%.
Starting Friday, Canadians and other travelers are now required to register with US immigration authorities if they plan to stay here for more than 30 days, according to an executive order issued by President Trump.
Previously Canadians could stay in the US for up to six months without a visa.
