United Airlines’ CEO has backed Donald Trump’s tariff plan despite the uncertainty it is causing the travel sector.
“We should all take a breath,” Scott Kirby said at the Semafor World Economy Summit on Thursday. “It was just the first move in a chess game, and there are a lot of moves left to come.”
“I think it’s easy to argue the tactics, but the president has a genuine desire to make things better for middle-class Americans, to create good careers,” he added.
Kirby suggested that Trump’s tariffs will create more jobs like those at United, where he said employees can work at one place for 40 years and earn six-figure salaries after reaching seniority.
Treasury Secretary Scott Bessent has said that the tariffs are part of a trade strategy to increase the number of manufacturing jobs in the US.
However, tariffs are also expected to raise the inflation rate and reduce the dollar’s purchasing power, leaving consumers with less money to spend.
Airlines face travel demand uncertainty
Airline stocks have been particularly volatile in reaction to tariff announcements because travel is one of the first things people can cut back on.
“We’ve been through periods where people are unhappy before,” Kirby said.
He also said that customers don’t appear to have given up summer travel plans, but he added that some people may indeed be cutting back as a precaution.
Airlines warned of reduced travel demand and announced plans to cut flights in their first-quarter earnings this month.
In its Q1 earnings, United said the economy was “impossible to predict” and took the unusual step of setting out two profit forecasts for the year.
It kept its January expectations of adjusted earnings per share of $11.50 to $13.50 but said that this could be as little as $7 per share in the event of a recession.
American Airlines on Thursday withdrew its full-year guidance due to economic uncertainty.
“We came off a strong fourth quarter, saw decent business in January, and really domestic leisure travel fell off considerably as we went into the February timeframe,” American Airlines CEO Robert Isom told CNBC.
Delta Air Lines abandoned plans to expand capacity by 4%, with CEO Ed Bastian warning that “growth has largely stalled.”
Kirby’s hopeful outlook could inspire confidence in investors that things aren’t too bad for airlines, especially since United is the world’s largest by fleet size.
It is also the biggest customer of Boeing, which has seen planes returned by Chinese airlines due to the tariffs. The planemaker was supposed to deliver 50 jets to China this year, but is now looking to remarket them to other countries.
