Find out why flights in the US have dropped in price.

This month, airline CEOs told Wall Street that traveler demand for domestic flights is weaker than anticipated, giving them optimistic forecasts for early 2025. During a series of financial reports, they cited causes ranging from President Donald Trump's shifting tariff policies to market instability and, most notably, a lack of economic certainty.

"Nobody really enjoys uncertainty when they're talking about what they might do on vacation and spending hard-earned dollars," American Airlines CEO Robert Isom said on a quarterly earnings call last Thursday.

This indicates that airlines are once again dealing with excess seats. Delta Air Lines, Southwest Airlines, and United Airlines have announced they will lower their capacity expansion projections following what they continue to anticipate as a robust summer vacation season.

Delta, Southwest, Alaska Airlines, and American Airlines suspended their financial projections for 2025 this month, arguing that the current US economic situation is too uncertain. United Airlines offered two scenarios: one in the event the country faces a recession, and stated that it expects to make a profit in both cases.

This has led to a drop in airfare prices. According to recent data from the Bureau of Labor Statistics, airfares decreased by 5.3% in March compared to the previous year. The Easter holiday, a time when many people travel due to school vacations, occurred in March of last year, although fares also experienced a 4% drop in February of this year.

Business leaders noted that, adding to the pressure, there is a slower-than-anticipated increase in business travel, which faces similar obstacles to those faced by many families. At the same time, official travel has fallen sharply due to the austerity measures implemented by the Trump administration and the massive job cuts this year.

“If uncertainty arises, the first thing to go is corporate travel,” said travel and transportation analyst Conor Cunningham at Melius Research.

Separately, Delta CEO Ed Bastian said on April 9 that business travel was expected to grow 10% annually by early 2025, but that growth has remained steady since then.

Airlines consider corporate travel essential, as these passengers tend to be less price-sensitive and frequently book last-minute, when ticket prices are typically higher. Seat saturation on domestic air travel is leading airlines to lower fares in order to fill their flights.

On Wednesday, Alaska Airlines announced that lower-than-anticipated demand could negatively impact its second-quarter profits. Chief Financial Officer Shane Tackett told CNBC that while demand has held up, the airline has adjusted some fares to ensure seat occupancy.

"Rates are not as strong as they were in the fourth quarter of last year and going into January and the first part of February," Tackett noted in an interview last Wednesday. He also stated that demand remains very high for the industry, however, but has not reached the peak level many had expected to maintain after the previous year.

In the forward section of the aircraft, executives affirm that interest remains more robust, as U.S. passengers continue to travel abroad in large numbers. However, ongoing concerns still affect the sector. "Confidence will restore economic stability, and I am convinced it will do so in a short period of time," Isom commented.