ATLANTA — Delta Air Lines pulled its guidance for 2025 as the trade war scrambles expectations for business and household spending and depresses bookings across the travel sector.
“With broad economic uncertainty around global trade, growth has largely stalled,” CEO Ed Bastian said in a statement. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures.”
In the first quarter, Delta earned $240 million, or 37 cents per share. A year earlier it earned $37 million, or 6 cents per share.
Stripping out one time costs and benefits, earnings were 46 cents per share. That’s better than the 40 cents per share analysts polled by Zacks Investment Research predicted.
Yet shares of Delta Air Lines Inc. declined before the opening bell and the sector has been battered this year as investors, anticipating trouble from rising tariffs, put their money elsewhere. Shares are down 41% this year for the nation’s most profitable airline, which is better than rivals American and United.
Quarterly operating revenue climbed to $14.04 billion from $13.75 billion, beating Wall Street’s estimate of $13.81 billion.The average fuel price per gallon declined to $2.47 from $2.79.
Delta cut its first-quarter earnings and revenue outlook last month, saying at the time that a recent decline in consumer and corporate confidence amid growing uncertainty over the economy was weakening domestic demand.
Delta said in March that it expected first-quarter revenue to rise between 3% and 4% compared with a year earlier, down from projections of 7% and 9%.
In January, Delta released fourth-quarter results that topped Wall Streetʻs profit and revenue estimates as the company benefited from strong demand during the crucial holiday period.
Yet conditions have deteriorated since then with a burgeoning trade war leaving consumers and businesses unsure about what comes next. Both have begun to pull back on spending, and that includes travel.
Bastian said Delta foresees June quarter profitability of $1.5 to $2 billion but will not update its full-year outlook “given the lack of economic clarity.”
The airline previously said that it expected 2025 earnings of more than $7.35 per share and free cash flow of more than $4 billion. At the time the company was expecting strong travel demand to continue, and that has clearly changed.
A month ago Bastian was confident enough to stick by Delta’s guidance for the year. Speaking at the JPMorgan Industrial Conference, the executive said at the time that Delta was feeling good about where it was at.
“There’s nothing that we’ve been through these last couple of months to indicate there’s any cracks in any of this,” he said. “We anticipate margins continuing to expand and we think margins will expand this year, even with the slower start to the year.”
Yet uncertainty over U.S. trade policy has rattled companies in every economic sector since then. For the second quarter, the airline is looking for earnings between $1.70 and $2.30 per share, with total revenue down 2% to up 2%. Analysts surveyed by FactSet predict earnings of $2.21 per share.
“2025 is playing out differently than we expected at the start of the year,” Delta President Glen Hauenstein said. “As a result, we are adapting to current conditions while staying true to our long-term strategy.”