Delta Air Lines revised its outlook for 2025 on Wednesday, pulling its guidance as the ongoing trade war creates uncertainty around business and consumer spending, which is negatively impacting bookings across the travel industry. CEO Ed Bastian stated that economic uncertainty and slow growth are causing the company to focus on managing costs and cash flow while reducing planned capacity growth for the latter half of the year.
In the first quarter, Delta posted a profit of $240 million, or 37 cents per share, compared to $37 million, or 6 cents per share, a year ago. After adjusting for one-time costs and benefits, earnings came in at 46 cents per share, surpassing analysts’ expectations of 40 cents per share.
Despite this positive performance, Delta’s stock dropped in premarket trading, as the broader airline sector has struggled this year due to concerns about rising tariffs and their economic impact. Delta’s shares have fallen by 41% this year, although it is still performing better than its competitors, American Airlines and United Airlines.
The airline’s revenue increased to $14.04 billion from $13.75 billion, exceeding Wall Street’s estimate of $13.81 billion. However, Delta had to revise its earnings and revenue forecast for the first quarter after a decline in consumer and corporate confidence, partially due to the growing uncertainty about the economy. Previously, Delta had expected a 3% to 4% revenue growth for the quarter, but this was reduced from initial projections of 7% to 9%.
Despite the challenges, Delta still anticipates a profitable second quarter, forecasting earnings of between $1.5 billion and $2 billion. However, the airline will not update its full-year outlook due to the economic uncertainty. Previously, Delta had projected earnings of over $7.35 per share for 2025 and free cash flow exceeding $4 billion, expecting strong travel demand to continue, a prediction that has since changed.
In March, Delta had expected a better outlook and was confident in its performance, but the intensifying trade war has caused both consumers and businesses to become more cautious, pulling back on spending, including travel. For the second quarter, Delta forecasts earnings of between $1.70 and $2.30 per share, with revenue potentially decreasing by 2% or rising by 2%. Analysts expect earnings of $2.21 per share.
Delta’s president, Glen Hauenstein, noted that 2025 is not playing out as initially expected, and the company is adjusting to the current economic environment while staying true to its long-term strategy.
