As air travel is down, the United States stands to lose $12.5 billion in international visitor spending this year, said a tourism organization.
Airline companies in the United States suffered an after-tax net loss of $225 million in the first quarter of this year following three successive profitable quarters, the Bureau of Transportation Statistics (BTS) said in a June 17 statement.
The recent decline follows a $2.4 billion net profit in the fourth quarter of 2024. On the positive side, this year’s first-quarter loss is lower than that of 2024, when the airlines registered $1.7 billion in net loss.
Both domestic and international operations registered net losses in the first quarter. However, only domestic operations were in the red in terms of pre-tax operating profit.
The BTS statement comes after executives of multiple airlines have raised concerns about economic uncertainty.
In an April 24 statement, American Airlines reported suffering a net loss of $473 million in the first quarter, with the company blaming “economic uncertainty that pressured domestic leisure demand” as one of the factors negatively affecting revenue.
American Airlines also opted to withdraw its full-year guidance, promising to provide an update on the matter “as the economic outlook becomes clearer.”
Similarly, Alaska Air Group on April 23 reported a net loss of $166 million for the first quarter and did not provide an update on full-year 2025 guidance, citing “recent economic uncertainty and volatility.”
There is also weakness in travel demand within the United States. During an earnings call on May 8, Ariane Gorin, CEO of travel company Expedia Group, said the company’s bookings and revenues were at the lower end of the guidance range due to “weaker-than-expected travel demand” in the United States and into the United States.
Meanwhile, a March 28 report from Bank of America had already warned that domestic tourism was under pressure. The bank’s aggregated card data showed “softer lodging, tourism, and airline spending,” the report said.
The softer travel spending comes amid low levels of disposable personal income among Americans compared to four years ago.
U.S. real disposable personal income stood at $17,978 in April this year, according to data from the Federal Reserve Bank of St. Louis. This is down from the peak of $20,445 hit in March 2021.
