Virgin Atlantic Airways Ltd warned of weakening US demand for travel to the UK, amid growing uncertainty among American consumers concerned about the fallout from US President Donald Trump’s economic policies.
Ticket sales on flights originating in the US have begun to flag in recent weeks, after running above 2024 levels at the start of the year, Chief Financial Officer Oliver Byers said Monday on a conference call. Conversely, demand from Europe to the US has held up well for the UK-based transatlantic specialist.
“In the last few weeks we have started to see some signals that US demand is slowing,” Byers said. The spring travel season is “the period where we’re seeing some weakness.”
The comments raised alarm among investors, who are on the lookout for any signs of deterioration in the lucrative North Atlantic corridor due to US tariffs and the potential for anti-American sentiment. Shares in IAG SA, the parent of Virgin Atlantic rival British Airways, fell as much as 6.8%. Other major airlines on both sides of the Atlantic saw drops among a slide in global stocks.
Byers spoke after Virgin Atlantic, founded by billionaire Richard Branson, reported its first profitable year since 2016. Until recently, transatlantic routes had seen healthy business from both leisure and corporate travelers, even as concerns mount that the Trump administration’s crackdown on immigration may put Europeans off from flying to the US.
But more airlines in the US have said they’ve detected signs of travel restraint on domestic routes as consumers reconsider their spending habits. Delta Air Lines Inc. cut its profit outlook in half at the start of the year, followed by American Airlines Group Inc., which predicted that its first-quarter loss would be roughly double its prior guidance.
“The danger is, is this going to spill over to the transatlantic,” Conroy Gaynor, senior equity analyst at Bloomberg Intelligence, said earlier.
Delta shares slipped 2.5% in pre-market US trading. United Airlines Holdings Inc. and BA’s transatlantic partner American Airlines fell to a similar degree. In Europe, Deutsche Lufthansa AG and Air France-KLM, a partner with Delta and Virgin Atlantic on North Atlantic routes, each slid more than 4%.
European demand, particularly from business travelers, remains strong, Byers said. The company, which also flies to vacation destinations such as Las Vegas and Florida, still expects to increase its US revenue this year after adding 4% more capacity, he added.
Virgin Atlantic reported a profit before tax and exceptional items of £20 million ($25.9 million) for 2024 and ended last year with cash of £443 million, according to a statement. The airline also said it paid down £174 million of pandemic-related debt in the period.
About £300 million of annual costs were eliminated during the pandemic, and the airline has maintained those savings as business rebounds, Byers said.
The closely held carrier has added new routes to Toronto, Riyadh and Cancun, as well as new lounges at airports such as Los Angeles.
Virgin’s load factor, which measures the percentage of seats filled on a plane, was 77% last year. That compares with 85% for IAG, which also owns Aer Lingus and Iberia, on North Atlantic routes.
Issues with Rolls-Royce Holding Plc engines fitted to Boeing Co. 787 Dreamliners have forced Virgin Atlantic to pause some routes to Cape Town, Israel and Ghana. Byers reiterated that the company expected the problem to persist for the whole of 2025, though has taken steps to minimize disruptions.
Written by: Kate Duffy and Anthony Palazzo — With assistance from Nick Bartlett @Bloomberg
The post “Virgin Atlantic Warns of Slowing US Travel Demand to the UK” first appeared on Bloomberg