(Reuters) -American Airlines withdrew its 2025 financial forecast on Thursday, mirroring its peers, as concerns over discretionary budget amid tariff pressures and government spending uncertainties hinder carriers’ ability to predict travel demand.
U.S. President Donald Trump’s trade policies and sweeping tariffs have sparked a global trade war and raised the odds of the world spiraling into recession, making customers hesitant to spend on travel.
The economic downturn is creating headwinds for major U.S. airlines, which, just two months ago, were benefiting from strong travel demand and solid pricing across their networks.
With travel being a discretionary expense for many consumers and businesses, airlines are grappling with uncertainty around future travel demand due to unpredictable consumer behavior in a potentially deteriorating economy.
On Wednesday, Southwest Airlines, the largest U.S. domestic carrier, withdrew its financial forecasts for 2025 and 2026, citing industry-wide volatility reminiscent of the COVID-19 era.
Smaller rival Alaska Air also scrapped its profit outlook for the year.
American Airlines is also reeling from higher costs associated with expensive labor contracts signed last year.
The legacy carrier reported a net loss of $473 million, or 72 cents per share, for the quarter through March, compared with a loss of $312 million or 48 cents per share, a year earlier.
It had earlier forecast an annual adjusted profit per share of $1.70 to $2.70.
The airline reported a total operating revenue of $12.55 billion, down marginally from a year earlier.
Shares of the carrier were marginally down in premarket trade.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Vijay Kishore)
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