Economic worries could weigh on airline results as EU bookings drop

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.

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That comes after the European Travel Commission noted in a study published on 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, while 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 are leading to worsening European recession fears, with many worrying that consumer and travel spending could suffer as a result.

‘Analysts say 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.