Delta sees sharp volatility in Q2 revenue
Bookings for domestic travel have softened
Company slashes capacity growth plans
CEO says airline will defer aircraft deliveries to avoid tariffs
CHICAGO, – Delta Air Lines pulled its financial forecast for 2025 and projected current-quarter profit below expectations on Wednesday, saying travel demand has “largely stalled” as sweeping U.S. tariffs fuel economic uncertainty.
The U.S. carrier said it would defer aircraft deliveries that face tariffs and slash capacity to protect its margins in the face of softening demand. Those comments reassured investors and helped lift Delta shares 6% in afternoon trade.
U.S. consumer and business confidence have sharply weakened as President Donald Trump’s tariffs on imports from most of the world raise the specter of higher inflation and slower economic growth. Global brokerages have also lifted their expectations for chances of a recession.
Travel is a discretionary item for many consumers and businesses, so growing risks of a downturn have clouded the airline industry’s outlook and sparked a selloff in shares.
While Delta expects to deliver “solid” profitability and “meaningful” cash flow this year, CEO Ed Bastian said it would be “premature” to provide an updated full-year outlook.
“Given broad economic uncertainty around global trade, growth has largely stopped,” he said on an earnings call.
Delta forecast a profit of $1.70 to $2.30 a share for the quarter ending June. The midpoint of the forecast is $2 per share, compared with analysts’ average estimate of $2.30, according to data compiled by LSEG.
Underscoring the uncertainty, the company said its total revenue for the second quarter would range from 2% lower to 2% higher than a year ago.
Bookings from both leisure and corporate customers have softened, hitting demand for domestic travel, it said. Demand for premium and international travel, however, has remained resilient.
It’s a dramatic reversal from January when Delta had forecast record profits for this year. The airline’s shares have lost 37% this year.
The broader NYSE Arca Airline index has declined about 31% this year, underperforming the broader S&P 500 index .
Delta was the first major U.S. carrier to report its earnings. United Airlines is due to report its first-quarter results on April 15.
Analysts expect similar commentary from Delta’s rivals. Major carriers last month cut their first-quarter earnings estimates, citing mounting economic worries.
Some indicators are signaling more pain ahead. Air tickets sold through third-party online travel agencies for summer travel to Europe are down about 13% from a year ago, according to aviation analytics firm Cirium.
“The airline sector is in the eye of the storm,” TD Cowen’s Tom Fitzgerald said in a note.
AIRCRAFT DELIVERIES, CACITY CUTS
With demand slowing, U.S. airlines have started cutting flights to avoid lowering fares and to protect margins.
Delta said on Wednesday it was reducing its planned capacity growth in the second half of the year to flat from a year ago. It previously expected to grow capacity by 3% to 4%.
Bastian said the company would defer its aircraft deliveries instead of paying tariffs on them.
As of the end of 2024, Delta estimated it would receive 43 aircraft from European planemaker Airbus this year. Trump’s 20% tariffs on European Union products have inflated the costs of a number of those planes.
“If you start to put a 20% incremental cost on top of an aircraft, it gets very difficult to make that math work,” Bastian said. “We will defer any deliveries that have a tariff on them.”
Additionally, it would retire about 30 planes this year to save on maintenance costs. Its headcount is also estimated to be lower than last year.
Savi Syth, an analyst with Raymond James, said Delta’s measures to protect its profits will likely be viewed favorably by investors.
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