The CEOs of Europe’s largest long-haul airlines are watching the U.S. market closely amid fears about a decline in travel to the U.S. However, they aren’t seeing declines yet.
Speaking in Brussels on Thursday morning, the heads of Air France-KLM, Lufthansa Group, and IAG all offered their perspective on possible softness in travel between Europe and the United States. It follows speculation that recent policy shifts in Washington and economic uncertainty could dampen demand.
The trio spoke side by side at an event hosted by industry trade body Airlines for Europe.
“Meeting here in March 2025, we probably all agree something is happening out there. Globalization is changing,” warned Carsten Spohr, CEO of Lufthansa Group, of the broader international outlook.
Asked specifically about the health of the transatlantic market, Ben Smith, CEO of Air-France KLM offered a measured perspective: “We’re not seeing anything as of today, but it is concerning for us and we are watching – as we do all markets – very, very closely. As of today, we don’t see any material change in terms of capacity. It is ‘as planned’ for us moving forward.”
Smith’s assessment was echoed by Luis Gallego, chief executive of IAG – the parent company of British Airways, Iberia, and Aer Lingus. He acknowledged softness in the U.S., but not on long-haul routes from Europe: “American carriers are saying that they are not seeing the impact on the transatlantic business. They see weakness in leisure domestic demand, but not transatlantic,” he said.
IAG is more exposed to the highs and lows of the North American market than any other European airline. Along with its joint business partners, the group operates around 150 flights every day across the North Atlantic. IAG alone claims a 58% capacity share between London and the United States.
A Lesson from History?
For Lufthansa’s Spohr, historical context offered a degree of solace in uncertain times. “Many of us are of a similar age and children of the Cold War – how do we measure the transatlantic relationship? We measure it by people actually interacting with each other.”
Spohr highlighted the enormous capacity offered by European airlines and their U.S. partners this summer as evidence of a healthy – if fragile – industry. “There will never be more passengers on the transatlantic than this summer, so let’s not be misdirected from the obvious strains we have on the transatlantic relationship in political terms and economic terms. In terms of really measuring people having relations, interacting with friends and relatives, and spending a vacation across the Atlantic, the relationship has never been healthier than the summer of 2025.”
Airline summer season schedules start this week, with a ramping up of frequencies on many U.S. leisure routes from Europe. While not addressed directly by the CEO trio – the lag time between booking and travel means any meaningful change in transatlantic capacity is unlikely to come before the winter 2025-2026 schedule.
If Not America, Then Where?
If demand to the United States were to drop, Europe’s major airlines would be left with few alternative markets of scale.
For example, Spohr and Smith were particularly vocal about overseas competition making routes to Southeast Asia unviable for European carriers. Spohr said Lufthansa operates to just two destinations in the region – Singapore and Bangkok – down from 10. He suggested that this was not due to a lack of demand but an unbalanced competitive environment.
“There are not many industries where the Europeans are still playing in the global champion’s league. We’re standing here with self-confidence on the one hand, but huge worry on the other. Our market share is going down, not just because of government-owned carriers to the east, but also sometimes to private competitors and partners to the west.
“European aviation is falling behind. Europe cannot accept that. We are a continent that cannot defend itself, we are a continent that cannot provide itself with sufficient energy – at least we need to be a continent which is able to connect itself with the world on its own.”
A Level Playing Field
Meanwhile, Air France-KLM’s Ben Smith claimed Europe’s airlines are “falling behind” and losing market share to competitors outside Europe because of “a lack of a level playing field.”
Smith used the example of a trip from Nice in the south of France to Tokyo to illustrate his point. With no nonstop options, an itinerary connecting via an EU hub to Japan would be taxed far more heavily than one with a transit stop in Istanbul or the Middle East. Smaller labor costs and lighter consumer protections are another perennial gripe.
Around 20% of all aircraft globally are operated by European carriers and of the five billion passengers worldwide expected in 2025, around one billion will be in, to, or from Europe.
Perceived over-regulation was another concern for the airline chiefs, with Spohr referencing Lufthansa Group’s recent acquisition of Italian flag carrier ITA Airways: “Our little approach to buy an Italian airline was in the end a 700-page document – that’s just one crazy example of where we’ve gotten to, and it needs to change.”
Airlines for Europe data suggests regulatory costs have tripled in a decade to €15 billion ($16.2 billion) a year.
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