Two major airlines have warned that European tourists are avoiding visiting the US this summer.
Air France and Lufthansa reported weaker demand for transatlantic bookings from Europe to the US in the first quarter of the year.
It comes as Donald Trump’s aggressive trade policies and border crackdowns are putting tourists off vacationing in America.
‘We know there are a lot of customers that are holding back in buying tickets for a little more clarity on… the border, and things like that,’ Air France-KLM CEO Ben Smith told investors on an earnings call on Wednesday.
Air France saw a 2.4 percent dip in transatlantic bookings from Europeans for travel in May and June compared with the same time last year, The Financial Times reported.
Steven Zaat, the airline’s chief financial officer, said that the impact on the airline had been limited as there was more demand for tickets going from the US to Europe.
However, a continued pullback in transatlantic travel could spell major issues for European long-haul airlines which are dependent on the high-margin trips to the US.
Lufthansa, British Airways and Air France all make around 50 percent of their profits from their flights to and from the US, according to analysis from Barclays.
Lufthansa has seen a drop in demand from Europeans travelling to the US this summer
Ben Smith, CEO of Air France, said tourists want more clarity before buying tickets
Lufthansa also reported a weakening in transatlantic bookings as Europeans show hesitancy about visiting the US during the usually busy summer period.
‘When it comes to vacation trips to the US, especially from the German, Austrian and Swiss markets, it’s easy to imagine conversations around the kitchen table where families are saying, “We don’t know yet if we really want to go,”‘ CEO Carsten Spohr explained on the airline’s earnings call on Tuesday.
However, Spohr said he hoped the recent softening in the White House’s rhetoric on tariffs would lead to a pick-up in demand later in the year.
‘The discussions about tariffs are no longer as heated as they were four weeks ago,’ he told analysts.
‘That is why we believe that some of these bookings will be recovered in the coming weeks.’
Despite the hopeful note, Lufthansa still plans to pull back its plans to expand the amount of transatlantic flights from 6 percent to 3 percent by the final quarter of the year.
The total number of foreign visitors to the US dropped by 12 percent in March compared to the same time last year, The Financial Times reported.
One of the biggest hits has come from Canadians, many of whom are actively boycotting the US following Trump’s aggressive trade policies and threats to annex the country into becoming the ’51st state.’
European long-haul airlines are dependent on profits made from transatlantic routes
Canadians are cutting back on trips to the US, and taking vacations elsewhere
Lufthansa CEO Carsten Spohr warned that Europeans are pulling back on US vacations
Palm Springs have put up signs to express their respect for their Canadian visitors
The number of Canadians making trips to the US by car dropped 32 percent in March compared to a year ago, according to Statistics Canada figures.
It marked the third straight month of declines — including a 23 percent plunge from the month before.
Air travel also took a hit, down 13.5 percent in March year-over-year.
Canadians have long been the top international travelers to the US, driving $20.5 billion in spending last year.
Even a 10 percent dip could wipe out $2 billion in economic activity and cost 14,000 jobs, according to the US Travel Association.
Tourist hotspots that rely heavily on Canadian visitors, such as Buffalo, New York and Old Orchard Beach in Maine, will be hit hardest.
