Several major airlines in the United States reduced their first-quarter financial forecasts on Tuesday, causing concerns amongst investors about the possible impact of a slowing economy on travel demand.

According to Reuters.com, U.S. airline stocks fell sharply in premarket trading on Tuesday after American, Delta, Southwest, and United reported declining profit forecasts.

American reported a seven percent decline in its first-quarter profit forecast, while Delta¡¯s dropped 11 percent, Southwest¡¯s fell by three percent and United¡¯s was down eight percent.

Some of the concerns that have resulted in the airline industry¡¯s forecasted decline include U.S. President Donald Trump's tariffs, a broad market selloff on Monday, a potential federal government shutdown, and the possibility of a recession.

The economic concerns are causing travelers to reduce discretionary spending, which could result in increased caution when planning trips. Just a few months ago, carriers reported strong travel demand and high pricing across their networks.

¡°Concerns about U.S. consumer strength, possible DOGE impacts on governmental air travel demand and Federal Aviation Administration (FAA) staffing, US government tariff uncertainties and several high-profile aviation incidents across North America have all occurred since late January,¡± Citi analyst Stephen Trent told Reuters.

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