The nation’s big airlines are worried about weakening demand. Here’s why ...

12.03.2025 - 17:43 / thepointsguy.com / Scott Kirby / Ed Bastian / Trump / Robert Isom

Have the winds suddenly shifted for U.S. air travel, or is it just some momentary turbulence?

That was the question discussed by the leaders of the country's largest airlines as they reported weaker-than-expected performance in the first quarter at a J.P. Morgan investor conference on Tuesday.

"The business at the core is healthy," said Ed Bastian, CEO of Delta Air Lines. "We just need to continue to better reset around demand and what we're seeing in the environment."

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The Atlanta-based carrier cited weather, the American Airlines flight 5342 and Delta flight 4819 accidents and broader macroeconomic uncertainty for the move to halve its revenue growth forecast for the first quarter.

American, JetBlue, Southwest Airlines and United Airlines joined Delta in lowering their expectations for the first quarter. The common theme: a weak macroeconomic environment and lower consumer confidence, particularly after the AA5342 accident at Ronald Reagan Washington National Airport (DCA) in January.

Unsaid was the cause of much of that economic uncertainty. Since President Trump's inauguration on Jan. 20, government travel spending has slowed dramatically, probationary federal employees have been laid off en mass and the administration has threatened or implemented steep tariffs on goods from China and some of the U.S.'s closest trading partners, including Canada and Mexico.

Robert Isom, CEO of American, called both the economic uncertainty and the AA5342 accident a "big deal" to the airline's business.

American brings in about 1.5% of its revenue from government travel, a large part from its hub at DCA, said Isom. That segment of its business has seen a "big impact" from the recent government spending cuts.

"DCA, historically, has been one of our most profitable hubs and, over the long run, I am confident it will return to its full share of profitability," he said.

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United has also been hit hard by the pullback in U.S. government spending thanks, in part, to its hub at Washington's Dulles International Airport (IAD). Government-related revenue is down by about half since the beginning of the year, CEO Scott Kirby said. The segment previously made up roughly 2% of United's global revenue.

The Chicago-based carrier is correcting for the loss in government business by retiring 21 aircraft earlier than planned and cutting some flights. The cuts include select flights to Canada, where there is a "big drop in Canadian traffic to the U.S.," and some red-eye flying, Kirby said.

"Nothing that we have seen in the short term impacts what we think is going to be happening