Delta Airlines Cuts Revenue and Earnings Forecasts Amid Economic Uncertainty

A Delta Airlines plane sits on the tarmac at JFK Airport on March 11, 2019, in New York City.

On March 10, Delta Air Lines announced a significant reduction in its revenue and earnings outlook for the first quarter of the year. The airline is facing challenges due to weaker domestic demand, which it attributes to ongoing economic "uncertainty." This change in forecast reflects broader trends affecting consumer and corporate confidence.

In a filing with the U.S. Securities and Exchange Commission, Delta stated that it now expects revenue for the quarter ending on March 31 to increase by no more than 5% compared to the same period last year. This is a downgrade from their earlier prediction made in January, which had anticipated 6% to 8% growth.

Additionally, the airline adjusted its profit outlook, anticipating earnings per share to fall between 30 cents to 50 cents, down from the previous estimate of 70 cents to $1 per share.

Delta explained that this downtrend is attributed to "the recent reduction in consumer and corporate confidence caused by increased macro uncertainty," leading to a decline in domestic demand. Following the announcement, Delta’s shares dropped 5.5% on the New York Stock Exchange and fell even further—by 13%—in after-hours trading.

Market Reactions and Future Outlook

Despite these challenges, Delta reported a record adjusted operating revenue of $61.6 billion for 2024, with an operating income of $6 billion. Looking ahead, the company expressed optimism for 2025, predicting strong demand for travel, particularly for premium products and experiences.

Delta CEO Ed Bastian emphasized in an interview on CNBC's Closing Bell that while consumer confidence has decreased, he does not believe the country is headed towards a recession. He pointed out that while there is uncertainty, businesses are likely to be poised for growth once conditions improve. Bastian noted that declining oil prices can provide a positive outlook for the airline industry.

Additionally, Bastian mentioned that concerns about flying safety have impacted the airline, particularly following an incident where a Delta plane crash-landed and overturned in Toronto, although no fatalities occurred. Following the incident, Delta offered $30,000 to each passenger on the flight.

Industry Trends

At a JPMorgan airline industry conference, several airline CEOs are expected to provide updates on current demand trends. This includes leaders from United Airlines and Southwest Airlines.

As of now, Delta holds the largest market share in the United States at 17.8%, slightly ahead of American Airlines at 17.5% and United Airlines at 16.0%. In 2024, Delta served over 200 million customers with 5,000 daily flights to more than 290 destinations, operating over 720 aircraft. Founded in 1925, Delta is the oldest airline in the United States and employs around 100,000 people.

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