Economic Concerns May Impact Airlines As Bookings Fall

European airlines are preparing for first-quarter results. Economic uncertainty may impact travel demand. A study shows fewer Europeans are planning summer trips. Gen Z travellers are exceptionally cautious. Lower fuel prices could offer some relief. Airlines are monitoring the situation closely. They are also adapting to changing travel patterns due to climate change. Destinations with mild climates are gaining popularity.

European airlines are set to report first-quarter results in the coming weeks, offering outlooks for the lucrative travel season amidst growing worries that economic uncertainty could slow demand and threaten earnings. That comes after the European Travel Commission noted in a study published Wednesday that Europeans are making fewer travel plans for this summer on the continent, particularly among the Gen Z demographic.

"For European airlines, the key risk is to demand and unit revenues, whilst an area of upside is from lower fuel prices," Ruairi Cullinane, an analyst at RBC, said in a note. That marks the first sign of a potential slowdown in what was seen as unrelenting travel demand after the COVID pandemic subsided, leading to a strong return to profit for much of the airline business.

Global economic instability triggered by US President Donald Trump's tariff threats is worsening European recession fears, with many worrying that customer and travel spending could suffer. Analyst says while the risk of a shift in demand was present, sizeable drop-offs in demand had yet to be noted.

"Demand indicators are not all flashing red," Cullinane told Reuters.

Lufthansa reports on Tuesday, and Air France KLM reports on Wednesday. Analysts expect some backlash to an outlook based on a later Easter date, pushing a key earnings period back into the financial year.

While airlines aren't seeing clear adverse outcomes yet, the survey showed that about 10