Summer is usually the golden season for airlines, a time when they soar high with profits. But this year, things are looking a bit different. Airlines started 2025 with high hopes for strong growth, but a series of setbacks has thrown a wrench in their plans. Instead of gearing up for big profits, they're now cutting back on flight routes and bracing for a rough financial ride.
Air traffic control problems have been a major headache, causing flight delays and cancellations. These issues have fed into traveler worries over safety, which began in January with the worst US air crash in decades. Since then, there have been more incidents, like a non-fatal crash in Toronto and reports of near-collisions at various airports. After the fatal crash in Washington, DC, Delta CEO Ed Bastian said the airline saw an immediate drop in ticket sales. "It caused a lot of shock among consumers," he said. "We saw a pretty immediate stall in both corporate travel and bookings. Consumer confidence and certainty in air travel started to wane a little bit as questions of safety came in."
Safety concerns haven't been helped by recent reports of air traffic controllers at Newark Liberty International Airport losing both radar and communication abilities. There were no crashes, but it led to some controllers taking trauma leave, causing long delays and cancellations for thousands of flights. "I’ve had more friends, colleagues, and acquaintances say they don’t want to fly right now than normal," said William McGee, senior fellow for aviation and travel at the American Economic Liberties Project think tank. "Not because they’re scared of crashes, but because they don’t want to deal with delays and cancellations."
But safety isn't the only worry. There are broader economic concerns at play. A global trade war and other economic issues are driving down the value of the dollar, making overseas travel more expensive for Americans. Meanwhile, foreign travelers are staying away either in protest over actions by the Trump administration or due to immigration concerns. International travel, a key profit driver for the nation’s three largest airlines, has been hit particularly hard. According to analysis by aviation analytics firm Cirium, bookings from the United States to Europe from June through August fell 9.8% compared to a year ago. And it’s even worse in reverse, with 12% fewer bookings on flights from Europe to the United States.
Then there's the Real ID requirement for boarding flights, which could be keeping travelers away from airports until they can upgrade their driver's license. This process can take weeks or even months. So far, the new security rule has had little apparent impact, according to one airline executive. About 7% of Americans are showing up at TSA checkpoints without a Real ID or an alternate form of allowable identification, such as a passport or military ID, according to a TSA spokesperson. But the agency said many of those without the Real ID or equivalent are being allowed through after additional screening. The TSA expects to end exceptions later this year.
Consumer confidence has also taken a hit. This month, it plunged to levels below those seen during the Great Recession. The Conference Board’s confidence survey found in April that Americans intending to fly in the next six months fell 12.5% from January. "It really is a perfect storm of a lot of things affecting the airlines," said McGee. "Summer is definitely going to be softer for the airlines. And summer is where the biggest part of the money is made."
Instead of gearing up to make big profits, airlines are cutting back flight routes for the rest of the year to save money, stepping away from earlier optimistic earnings guidance. Airline stocks measured by the NYSE Arca Airline Index have lost more than 20% of their value since January 29, the date of the fatal crash at Ronald Reagan Washington National Airport. That was the first high-profile airline incident this year, but it was far from the last. Since then, there have been more incidents, like a non-fatal crash in Toronto of a Delta regional jet as well as reports of near-collisions on the ground and in the air at various airports across the United States.
The airlines have weathered worse situations in the past. The pandemic brought flying to a near-halt, requiring federal bailouts. The September 11 terrorist attack was followed by a string of bankruptcies and mergers. There have been massive financial losses due to previous spikes in fuel prices. But as the airlines begin a summer where they had expected smooth flying, they’re about to experience some unpleasant financial turbulence.
The summer of 2025 is shaping up to be a challenging one for airlines. A combination of safety concerns, economic worries, and new security rules is creating a perfect storm that could dampen what is usually a profitable season. Airlines are cutting back, and travelers are staying home. The road ahead is uncertain, but one thing is clear: the airlines will need to navigate these turbulent times with care.
