U.S. airlines look to steady the skies in 2025

Key insights from Phocuswright's U.S. Airlines: Market Essentials

By Phocuswright Marketing

The latest U.S. Airlines: Market Essentials report reveals a travel segment facing serious headwinds. With consumer confidence waning and international sentiment cooling, U.S. airlines are projected to eke out just a 1% revenue gain in 2025. Even more telling: average ticket prices dropped 6% year-over-year in March, while GDP shrank and key source markets—like Canada—pulled back dramatically on U.S. travel.

But this isn’t just a story about numbers. It’s a roadmap for travel leaders navigating a high-stakes environment. If you're in distribution, loyalty, pricing or strategy, understanding how direct bookings are hitting record highs (73%), and how low-cost carriers are reshaping their playbook, is critical to staying ahead of disruption.

This report doesn’t just unpack the state of the airline industry, it shows how broader economic, political, and digital shifts are reshaping the competitive landscape through 2028.

Want the full picture of the U.S. airline market? The implications may hit closer to home than you think.

⬇️ Here are 6 insights that will help clear the air.

U.S. airlines face an uncertain year as economic concerns and geopolitics turn many travelers away from airports. A meager 1% gain in airline passenger revenue is projected for 2025 as both leisure and business travelers pull back demand.

Flight plans changed: An eye on airline forecasts

Early optimism meets harsh realities

After regaining stability in 2024 with single-digit growth, airlines entered 2025 with modest expectations.
That optimism has faded. Demand, especially for international travel, is weakening due to economic and geopolitical pressures.

Demand softens across the board

Passenger trips rose 3% in 1Q25 vs. 1Q24, but average ticket prices fell 6%.
In May 2025, U.S. travel agency air ticket sales dropped 5% year-over-year, with flat passenger volumes.

International and corporate travel hit hardest

Corporate travel demand fell 8% YoY in May, while OTA-issued trips rose 8%, indicating a shift toward more price-sensitive, self-directed bookings.

Airline response to changing conditions

All Big Three carriers (Delta, United, American) have downgraded their 2025 projections and are now trimming capacity growth to match lower demand.

Macroeconomic & political headwinds

Tariffs and political tensions are sapping consumer confidence, with the Consumer Expectations Index at its lowest point since 2011.

TSA data offers mixed signals

TSA screened 5% more passengers in 2024 (904M total), and early 2025 domestic demand remains somewhat steady, but trends suggest trouble ahead if consumer sentiment continues to fall.

More of the essential air insights

U.S. Airline Market Essentials 2025

New in 2025, this report delivers top-level takeaways for the U.S airline market, featuring charts and analysis on the key trends, segment highlights and market sizing datapoints that matter most.

Want insights that go beyond the headlines to guide your next moves, surface critical gaps and reveal what truly matters right now? Here's what you can expect in the report:

U.S. Airline Landscape
Distribution Roundup
Looking Ahead: LCCs Lose Ground, Where is NDC?, The Expansive Role of AI, Fear of Flying?

Charts, data and figures:

Fig. 1: Total Gross Bookings and Share by Segment, 2024

Fig. 2: Total U.S. Air Passengers and Percentage of 2019, 2022-2024

Fig. 3: Airline Gross Bookings, 2022-2028

Fig. 4: Online and Offline Gross Bookings and Online Penetration, 2022-2028

Fig. 5: Airline Online Market Share by Channel, 2024 and 2028

Fig. 6: Airline Gross Bookings Share by Channel, 2024 and 2028

Other publications in the U.S. Travel Market Report 2025 series (available now or publishing soon) include:

U.S. Airline Market Essentials 2025
U.S. Car Rental Market Brief 2025
U.S. Cruise Market Essentials 2025
U.S. Hotel & Lodging Market Essentials 2025
U.S. Online Travel Agency Market Essentials 2025
U.S. Packaged Travel Market Brief 2025
U.S. Travel Market Report 2025
U.S. Travel Market Data Sheet 2025 (subscriber only)

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