Line 33 is the recession brewing?

Airline CEO warned Wall Street this month that passengers have a stronger appetite for domestic travel than they would have hoped when they set a high forecast in early 2025.

They said that among a series of earnings calls, the reasons include President Donald Trump’s whipping tariff policies to volatile markets, most notably economic uncertainty.

"No one really likes uncertainty when they talk about what they can do during the holidays and spend money," American Airlines CEO Robert Isom said on Thursday's quarterly earnings call.

This means that airlines have too many seats on their hands. Delta Airlines, Southwest Airlines and United Airlines said they will cut their capacity growth plans after they still hope to be a strong summer travel season.

Delta, Southwest, Alaska Airlines and American Airlines achieved financial outlook for 2025 this month, saying the U.S. economy is too difficult to predict. United Airlines offers two prospects, one of which is if the U.S. falls into recession and says it can be profitable in either case.

This leads to cheaper air tickets. Air tickets fell 5.3% in March from last year, according to the latest data from the Bureau of Labor Statistics. Easter is a peak travel period that coincides with many school holidays, down in March last year, although fares also fell by 4% in February this year.

The pressure, coupled with the slow growth of corporate travel, faces challenges faced by many families, executives said. Government travel has also plummeted amid the Trump administration’s cost cuts and massive layoffs this year.

“If uncertainty arises, the first thing that disappears is corporate travel,” said Conor Cunningham, a travel and transportation analyst at Melius Research.

Delta CEO Ed Bastian said on April 9 that company travel increased 10% year-on-year in early 2025, but that growth has since flattened.

Business travel is key to major operators because these customers are less price sensitive and are usually booked when tickets may be more expensive.

Seat overhangs in the domestic sky are forcing airlines to lower prices to fill their aircraft.

Alaska Airlines warned Wednesday that demand that exceeded expectations could consume second-quarter revenue. Chief Financial Officer Shane Tackett told CNBC that demand has not fallen yet, but carriers have lowered some fares to fill the seats.

“Ticket prices aren’t as strong as the first part of last year’s fourth quarter, through January and February,” Tacart said in an interview Wednesday. “Demand remains high for the industry, but it’s not the peak we all expect last year to continue.”

Executives say demand is much better ahead of the plane, while U.S. customers are still flying in the fight.

But lingering concerns are still having an impact on the industry as a whole.

"Certainty will restore the economy, and I think it will recover soon," Isom said.