US Airline Companies Suffer $225 Million Net Loss in 1st Quarter

As air travel is down, the United States stands to lose $12.5 billion in international visitor spending this year, said a tourism organization.

United Airlines planes land and prepare to take off at Newark Liberty International Airport in New Jersey on Jan. 27, 2025. Fabrizio Bensch/Reuters

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 in the first quarter of 2024, when the airlines registered $1.7 billion in net loss.

Both domestic and international operations registered net losses in the first quarter of 2025. However, only domestic operations were in the red in terms of pre-tax operating profit.

The BTS statement comes after executives at 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 a 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 because of “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 show “softer lodging, tourism, and airline spending,” according to the report.

The softer travel spending comes amid low levels of disposable personal income among Americans compared with four years ago.

U.S. real disposable personal income stood at $17,978 in April, according to data from the Federal Reserve Bank of St. Louis. This is down from the peak of $20,445 in March 2021.

Airline Sector Outlook

In a May 29 report, JP Morgan stated that overseas visitor numbers into the United States have declined. In addition, the domestic travel market has been negatively affected because of a drop in government-related flight bookings.

“In response, several U.S. airlines have reduced their earnings forecasts, and stocks have corrected accordingly,” the report stated.

But despite this gloomy outlook, U.S. airlines are “well-placed to weather the storm” amid a potential economic recession, according to the report.

“Airline stocks traditionally lose 40 percent of their value over six months leading into recession before doubling from there,” said Jamie Baker, JP Morgan’s U.S. airline and aircraft leasing equity analyst.

In a May 14 statement, the World Travel & Tourism Council forecast that the United States would lose a “staggering” $12.5 billion in international visitor spending in 2025, representing a 22.5 percent decline from the previous peak.

The loss would be a “direct blow to the U.S. economy overall, impacting communities, jobs, and businesses from coast to coast,” according to the statement.

Data on new international arrivals for March show a “sharp and widespread drop in inbound travel from many of the country’s key source markets,” the group stated.

For instance, on an annual basis, arrivals from the UK declined by almost 15 percent, Germany by 28 percent, and South Korea by nearly 15 percent.

“Without urgent action to restore international traveler confidence, it could take several years for the U.S. just to return to pre-pandemic levels of international visitor spend, not even the peak from 10 years ago,” said Julia Simpson, CEO of the World Travel & Tourism Council. “This is about growth in the U.S. economy—it is doable, but it needs leadership from DC.”

On a positive note for the airline sector, AAA is expecting flights for the Fourth of July holiday period to set “new records,” the group said in a June 20 statement.

“AAA expects 5.84 million travelers will fly to their destinations; that’s 8 [percent] of all Independence Day travelers. This year’s projection is a 1.4 [percent] increase over the previous record set last Independence Day week of 5.76 million air travelers,” AAA stated.