North American airlines seem to be gearing up for some pretty rough times ahead. Allianz Trade expects only about a 1.0% bump in revenue for 2025, which is the weakest among global rivals. One major issue is that domestic travel demand is fading; indeed, the average load factor on domestic flights has dipped by 6 percentage points, settling at roughly 78% after tariff moves announced by President Trump.
At the same time, the tourism scene, still picking up after a pandemic that really knocked the wind out of the industry, is running into fresh obstacles. For three years in a row, profit losses have battered many carriers, and now they’re caught up in what some are calling a “customs thunderstorm” over USA. This storm, with its mix of rising aircraft costs and production hiccups, is making an already tight capacity even more of a headache, especially when U.S. tourism seems poised for another downturn.
Sharp Decline in Western European Tourism to the U.S.
Visitors from Western Europe to America have taken a steep dive, particularly noticeable in March 2025, when numbers fell by about 17% compared to the previous year. Over the first quarter, arrivals from that region were down 7% year-over-year. It turns out that German and Spanish tourists, among others, are steering clear of the U.S. These shifts, according to data from the National Travel and Tourism Office, hit airlines with heavy investment in the American market particularly hard.
European Airlines Outperform Despite Turbulence
On a brighter note, European airlines are looking much more upbeat. They’re on track to post solid 10% revenue growth in 2025 despite the overall market funk. Lower fuel expenses and consistently high ticket prices have helped them keep afloat even as challenges loom. Even though there’s still turbulence here and there, the outlook for European airlines remains relatively positive compared with their North American colleagues.
Aircraft Supply Chain Woes and Rising Costs
Globally, the aviation industry is wrestling with an acute shortage of new jets, with manufacturers left with a staggering backlog of 17,000 aircraft. Production has not bounced back to pre-COVID levels, and to make matters more complicated, an ongoing trade war keeps rattling supply chains and pushing up costs. Aircraft prices have already climbed by around 16% over the past five years, and by 2030, Allianz Trade even predicts an extra 20% surge. All of this is stacking up extra pressure on airlines worldwide, making an already tough situation even tougher.