Airlines Face Weak Demand Amid Economic, Safety Concerns

Major U.S. airlines are warning of weaker-than-expected demand this spring, citing economic uncertainty and a sharp decline in government and corporate travel following two major aviation incidents earlier this year, ABC News reported.

U.S. carriers initially anticipated a strong first quarter, but Delta Air Lines CEO Ed Bastian admitted Tuesday that projections were off. Speaking at the J.P. Morgan Industrials Conference in New York, executives from Delta, Southwest, United, and American indicated concern about domestic bookings.

Airline officials pointed to two major accidents that have shaken consumer confidence.

The first, on Jan. 29, involved a deadly midair collision between an American Airlines regional jet and a U.S. Army Black Hawk helicopter over Washington, D.C. The second occurred on Feb. 17, when a regional jet crashed upon landing in Toronto, overturned, and caught fire.

"It caused a lot of shock among consumers. There's a whole generation of consumers that didn't realize these things can happen," Bastian said during the J.P. Morgan conference on Tuesday.

Following the D.C. crash, domestic bookings initially fell, rebounded slightly, and dropped again after the Toronto incident.

Meanwhile, government and corporate travel have declined significantly, with United reporting a 50% drop in government bookings.

American Airlines has been particularly affected at Ronald Reagan Washington National Airport, where it has reduced capacity to mitigate losses. Delta expects to lose $500 million in revenue this quarter — 4% less than it initially projected.

To stabilize the market, airlines plan to cut capacity, limiting the number of available seats. However, one area of optimism exists: Despite weak domestic demand, international travel remains strong, and carriers expect a solid summer season ahead.

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