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Delta Airlines dropped its 2025 outlook as the company warned that growth has largely stalled due to “broad economic uncertainties around global trade,” particularly stemming from tensions related to President Donald Trump’s tariffs.
In a statement, CEO Ed Bastian said, “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control.”
He later appeared on CNBC (CMCSA) to warn that a recession is likely. “I think we’re acting as if we’re going into a recession,” Bastian said. “I think everyone is going into a defensive posture. As a result of that, if that continues and we don’t get resolution soon, we’ll probably end up in a recession.”
Delta kicked off Wednesday with better-than-expected earnings, posting adjusted EPS of $0.46 versus the $0.38 expected by Wall Street. Adjusted revenue came in at $12.98 billion, matching forecasts, while net income jumped to $240 million, up from $37 million a year earlier. Shares rose more than 9% in Wednesday morning trading.
But while the headline numbers suggest resilience, Delta also said it plans to reduce flight capacity in the second quarter, signaling caution amid rising costs and shifting travel patterns. The airline cited the need to “restore operational reliability” and more tightly manage fuel and labor expenses.
Delta said that “given current uncertainty,” it is no longer stands behind its previous guidance that the company expected record profits in 2025. In January, Bastian predicted this year would be “the best financial year in our history.” The airline’s CEO still seemed confident in his company’s outlook a month ago when he said at the JPMorgan (JPM) Industrial Conference that “there’s nothing that we’ve been through these last couple of months to indicate there’s any cracks. … We think margins will expand this year, even with the slower start to the year.”
But Bastian told CNBC that, over the last six weeks, “we’ve seen a corresponding reduction in broad consumer confidence and corporate confidence.” He said that main cabin bookings are weaker than expected and that travel demand has slowed as a result of companies rethinking business trips among the reeling markets and cuts to the government workforce.
After Delta released its outlook, TD Cowen (TD) analysts Tom Fitzgerald and Heland Becker wrote, “We expect this to be the first of many 2H25 capacity reduction announcements from the airlines this quarter.”
United (UAL), American (AAL), Southwest (LUV), and other U.S. carriers are scheduled to report earnings later this month.