February 3, 2026
Finance

US Air Travel Faces Flat Growth Amid Rising Global Demand, Says IATA Leader

IATA Director General Highlights Challenges Hindering US Aviation Expansion Despite Worldwide Market Upswing

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Summary

The International Air Transport Association (IATA) Director General Willie Walsh reports that US air travel is expected to remain largely stagnant in the near term, while global air travel demand is forecasted to grow by nearly 5%. Various factors including aircraft shortages, tariffs, immigration policies, and supply chain constraints have contributed to this limited growth in the US market. Regulatory discussions on aircraft certifications, weather disruptions, and governmental staffing issues further complicate the recovery and expansion of US air travel.

Key Points

The International Air Transport Association forecasts flat growth in US air travel despite global demand increasing by 4.9%.
Challenges such as aircraft shortages, tariffs, stricter immigration policies, and supply chain disruptions hinder the US aviation sector.
FAA maintains commitment to impartial aircraft certification amidst calls for equal resource allocation between domestic and foreign aircraft.
Severe weather and prior government shutdown-related staffing shortages have contributed to significant flight delays and cancellations in the US.

Willie Walsh, serving as the Director General of the International Air Transport Association (IATA), recently conveyed concerns over the US aviation sector's ability to recuperate and grow in alignment with global trends. In remarks made during an interview at the Singapore Airshow, Walsh outlined that while the global demand for air travel is anticipated to expand at a rate of approximately 4.9%, the US market's growth is projected to be "broadly flat" for the foreseeable future.

This divergence in market trajectories stems from multiple compound challenges facing the US aviation industry. Chief among these are a shortage of available aircraft, ongoing tariff pressures, stricter immigration measures, and disruptions within supply chains, all of which have collectively contributed to stagnation within major American carriers. These limitations suggest that the US may not catch up to global air travel growth trends in the near term.

Addressing concerns surrounding international aircraft certification, specifically the potential decertification of Canadian-made Bombardier aircraft by the US government, Walsh expressed complete confidence in the Federal Aviation Authority’s (FAA) commitment to maintaining a non-political and strictly regulatory approach. This reassurance comes amid statements from FAA Administrator Bryan Bedford, who publicly endorsed President Donald Trump’s call for parity in certification efforts. Bedford emphasized the FAA's intent to invest equivalent resources certifying domestic aircraft, such as Gulfstream jets, as are allocated for foreign-owned models, aiming to ensure a "level playing field" in the aerospace sector.

Operational challenges have also impacted the US aviation industry, with a severe winter storm in January prompting flight cancellations on a scale comparable to early pandemic disruptions. Transport Secretary Sean Duffy highlighted the storm's significant effect on network reliability, citing several airlines including Delta Air Lines, JetBlue Airways, United Airlines, and American Airlines experiencing widespread delays and cancellations. These weather-related disruptions compound existing difficulties stemming from a prior 43-day government shutdown which resulted in notable staffing shortages and further operational setbacks.

Beyond operational and regulatory hurdles, the US tourism sector continues to face headwinds despite growth in global tourism demand. A recent report by the World Travel and Tourism Council (WTTC) highlighted a 6% decline in foreign visitors to the United States projected for 2025, contrasting with an overall increase in worldwide travel activity. The WTTC also detailed concerns over the Electronic System for Travel Authorization (ESTA), particularly the policy requiring disclosure of social media information, which could slash visitor spending by an estimated $15.7 billion and imperil approximately 157,000 American jobs linked to the travel industry.

These combined factors depict a complex landscape for the US aviation and travel sectors, indicating that while the global market may experience robust growth, the US faces structural and policy-driven challenges impacting its ability to expand air travel demand in alignment with international trends.

Risks
  • Potential ongoing regulatory and political pressures impacting aircraft certification and airline operations.
  • Operational disruptions caused by severe weather events can lead to widespread cancellations affecting airline revenues.
  • Staffing shortages resulting from prolonged government shutdowns may continue to impact airline performance and punctuality.
  • Decline in foreign visitors and changes to travel authorization policies risk reducing tourism-related economic benefits and employment.
Disclosure
Education only / not financial advice
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