Delta pulls financial forecast as Trump tariffs stall travel demand

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.

U.S. consumer and business confidence have taken a beating 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 odds for a recession.

Many consumers and businesses categorize travel as a want, not a need, clouding the airline industry's outlook and sparking a selloff in shares as risks of a downturn grow.

"With broad economic uncertainty around global trade, growth has largely stalled," Delta CEO Ed Bastian said in a statement. "Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook."

The Atlanta-based company 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, Delta 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.

Shares of the carrier were up 1% in premarket trading after the company reported an adjusted profit of 46 cents a share for the first quarter, compared with the 38 cents anticipated by analysts.

Last month, the company slashed its March-quarter profit estimate by half on mounting economic worries.

The airline's stock has lost 41% this year and is down 50% from its 52-week high. Similarly, shares of rival United Airlines have slumped 68% from their 52-week high.

The broader NYSE Arca Airline index has declined 31% this year, underperforming the broader S&P 500 index.

Delta was the first major U.S. carrier to report its earnings. United's first-quarter results are due on April 15.

Analysts expect similar commentary from Delta's rivals. Major carriers last month cut their first-quarter earnings estimates, saying rising economic uncertainty has led to a pullback in corporate and consumer spending.

SOFTENING DEMAND, SELF-HELP MEASURES

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.

With demand slowing, U.S. airlines have started culling flights to avoid lowering fares and 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 was also "actively" managing costs and capital expenditures. "In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control," he said.

"The airline sector is in the eye of the storm, but we believe Delta to be a better port in the storm than many peers due to its revenue diversity and balance sheet strength," TD Cowen's Tom Fitzgerald said in a note.