In May, European travel to the United States saw a significant decrease, leading major international airlines to reduce fares drastically for key U.S. cities.
Carriers like American, Air France, Delta, and British Airways faced a perfect storm of plummeting bookings, a strong U.S. dollar, and a shift in travel demand towards Mexico, Canada, and the Caribbean.
What used to be a profitable transatlantic summer season has undergone a dramatic transformation, as evidence shows Western European arrivals fell by 4.4 percent last month and saw an even steeper 17 percent decline in March.
This trend creates substantial uncertainty within the airline industry as U.S.-bound traffic from Europe stalls.
Consequently, airlines are aggressively discounting fares to ensure their flights remain full by shifting focus to markets where there is still a robust travel appetite, with demand for summer travel picking up.
This situation highlights not only a temporary fare adjustment but also indicates a broader rebalancing of global travel dynamics as we move into 2025.
According to preliminary figures from the U.S. National Travel and Tourism Office (NTTO), overseas arrivals to the United States declined by 2.8 percent in May compared to the same month last year.
Specifically, the number of travelers arriving from Western Europe dropped by 4.4 percent, continuing a concerning downtrend that started earlier this year.
The more pronounced drop reflected in March’s figures showcases a 17 percent decrease in travel from Western Europe, further amplifying the need for airlines to rethink their strategies.
While Eastern European travel showed an increase of 4.6 percent, it was insufficient to counterbalance the overall decline in figures from Western Europe.
The slump in travel has sent a clear message to the aviation industry: the demand from Europe for U.S. travel is softening, leading airlines to recalibrate their transatlantic engagement.
In light of this troubling demand, airlines have slashed fares to essential US cities significantly.
Data from Cirium indicates that average round-trip economy fares for over 50 transatlantic routes have decreased by approximately 7 percent compared to the previous year.
Notably, on some routes the price reductions are even steeper, with economy fares between Atlanta and London plummeting by 55 percent, marking one of the sharpest declines recorded this year.
Additional US destinations such as San Francisco, Washington D.C., Los Angeles, and Boston have also experienced fare reductions, especially along routes operated by major carriers like American, Delta, Air France, British Airways, and Lufthansa.
Hopper has reported that the average round-trip fare from the U.S. to Europe is now around $817, which represents a 10 percent decrease compared to last summer, aligning closely with pre-pandemic pricing levels in 2019.
Several factors have contributed to the decline in European interest in visiting the U.S.
Primarily, the strength of the U.S. dollar has translated to increased expenses for Europeans planning vacations in the United States.
Moreover, political tensions and stricter U.S. border enforcement policies have fostered a perception that the U.S. might be becoming less hospitable to foreign visitors.
Industry analysts noticed the tapering of transatlantic travel demand commencing early in 2025, with the slowdown intensifying following President Donald Trump’s revival of various political controversies.
His comments regarding annexing Greenland, alongside rekindling global trade disputes and promoting stringent U.S. immigration policies, appear to have negatively impacted European travel sentiments towards the U.S.
Despite the diminished influx from Europe, airlines report robust outbound demand from the United States.
Delta Air Lines noted that 80 percent of its long-haul international bookings originate in the U.S., providing some protection against the decline in European-origin traffic.
In its first quarter report, United Airlines experienced a 6 percent drop in European bookings but indicated that strong demand from U.S. travelers compensated adequately for the downturn.
Facing weakened bookings from its home market, Lufthansa has shifted its marketing strategies to attract U.S.-originating passengers with lower fares to fill seats, especially on U.S.-bound flights.
Air France-KLM CEO Ben Smith also acknowledged the observed slight downturn in transatlantic traffic and confirmed that the airline group is prepared to decrease fares further to remain competitive during the peak summer travel season.
American Airlines expressed confidence in the outbound market, with CFO Devon May stating that they are optimistic about the transatlantic sector, fueled by persistent demand from the U.S. despite global uncertainties.
As European traffic continues to decline, airlines are increasingly relying on travelers from Mexico, Canada, and the Caribbean to help sustain their international routes.
According to reports from Hopper, there is a scheduled increase of 4.3 percent in international flights departing U.S. airports this summer, indicating robust outbound momentum toward alternative locales.
Airlines have been responsive to this shift by boosting their capacity to cater to travelers from Latin America and the Caribbean, who are continuously driving demand for flights into U.S. airports.
The importance of Canadian travelers is also underscored as they play a pivotal role in filling the gap left by the downturn in arrivals from Western Europe.
Tourism Economics, a subsidiary of Oxford Economics, warns that 2025 may prove financially challenging for airlines operating on transatlantic routes.
Aran Ryan, the firm’s director of industry studies, highlighted that the decrease in European travelers visiting the U.S. combined with a slowdown in U.S. outbound travel to Europe compared to the previous year complicates profitability for these airlines.
In a bid to fill seats, carriers are resorting to pricing strategies reminiscent of the pre-pandemic era, such as massive discounts, flash sales, and short-term promotions to spur demand quickly.
For travelers, this means access to some of the lowest fares between Europe and the U.S. seen since 2019.
However, for the airlines, it signifies thinner profit margins and heightened competition.
In conclusion, the travel freeze from Europe witnessed in May has initiated a ripple effect throughout the international airline industry.
Consequently, airlines like American, Delta, Air France, and British Airways are cutting fares on routes to essential U.S. cities like Atlanta, Washington, Los Angeles, and Boston to maintain seat occupancy.
The strong U.S. dollar, political uncertainties, and the shift in travel demand patterns have sidelined European parties—while demand from Mexico, Canada, and the Caribbean rises to fill the void left by Europe’s retreat.
image source from：travelandtourworld
