Europeans are pulling back from travel to the US, but rich Americans are still going the other way, Europe's biggest airlines say
Europeans may be losing interest in visiting the US, but Americans are still keen on flying transatlantic — for now.
Air France-KLM, Europe's second-largest airline by revenue, said Wednesday that bookings on flights from Europe to the US in May and June are down 2.4% compared to last year. Meanwhile, those in the opposite direction have risen 2.1%.
Europeans instead seem to be looking anywhere else for their summer travels. The airline group's bookings from Europe to the rest of the world are up 9.2%, compared to 7.3% the other way.
"Europe is holding up against the turmoil with inbound traffic from both the United States and the rest of the world showing growth compared to last year," CEO Ben Smith said on Wednesday's earnings call.
Germany's Lufthansa, Europe's biggest airline by revenue, is seeing similar trends.
CEO Carsten Spohr said on a Tuesday earnings call that Americans are more willing to spend than Europeans, and the airline group is seeing stronger growth from the US than in other markets.
He added: "Bookings have slightly softened in the US, destinations to and from."
Tighter immigration rules in the US are one reason Europeans are looking to travel elsewhere.
In an interview with Bloomberg, the CEO of hospitality firm Accor spoke of declining bookings due to a "bad buzz," with more reports of Europeans being turned away at the US border.
For example, France's higher education minister told Agence France-Presse that a scientist was denied entry to the US after he was found to have sent texts criticizing Donald Trump.
The president's tariff plan has also caused economic uncertainty. Travel is one of the first things to suffer in such cases because it's a non-essential thing to spend money on and is relatively easy for consumers to forego.
However, people have also been more willing to pay for experiences post-pandemic, and premium cabins for leisure travel have been more resilient.
This may be driven by Americans, given that they earn about 35% more than French people on average. France is also a particularly popular vacation spot for Americans, especially since the pandemic.
But with the economic uncertainty set to continue and the impact of tariffs yet to be fully realized, some analysts think the worst is yet to come for airlines.
"At the moment, the US carriers and Lufthansa have pointed towards resilient premium leisure demand. We continue to think this will weaken due to wealth effects," Andrew Lobbenberg, a Barclays analyst, wrote in a Tuesday note.
In another note the following day, he added that Barclays analysts are "bearish" for transatlantic routes.
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