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Futures are again under pressure this morning as President Trump's reciprocal tariffs go into effect. China further escalated tensions this morning and retaliated by slapping an 84% tariff on US goods. Wall Street has been under intense pressure since the White House announced the tariff plan last week, with the S&P 500 sinking nearly 12%. Major companies are scrambling in the wake of the tariffs. Delta Air Lines (DAL) pulled its guidance, citing uncertainty. Walmart (WMT) also pulled its quarterly operating income forecast.
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Good to have you here with us. Just wanna get your biggest takeaways from the report plus the additive of of the set of actions that is very clearly tariffs that many CEOs are gonna have to acknowledge in some facet or another this earning season.
Yeah, so I guess my my biggest takeaway was it it wasn't as bad as we had expected Delta's results. Uh obviously they reset them right, you know, right during the JP Morgan conference so we're working off uh lower expectations, but uh we still saw some positive yields in the uh domestic market. Uh the Atlantic market was still pretty strong. Uh so my sense is that, uh you know, Delta's looking a bit forward like you you heard uh Ed Bastian just say, uh and you know, incorporating these results are clearly not the the recent, uh you know, tariff related uh disturbances in the marketplace. That's going to affect demand uh for sure, and I'm sure, you know, Ed obviously is seeing uh fares come in or demand real time, which we aren't. One Q again wasn't as bad as we would expect. Two Q looks like we're going to have to bring some numbers down. The market's consensus seems a bit high. But like I said, I guess he thinks it's still structurally sound if the turmoil can be eliminated.
But George, what's he gonna say? Yeah, I'm really worried about the future of the company. How how real do you think it is that there are enough consumers who are going to have to continue air travel, of course, and that being enough of a bottom on any consumers and economic slowdown that we might see for not just Delta, but the other airlines?
Well, I mean, so I do think if markets keep trending this direction, uh premium travel, which was a strong support for Delta, isn't going to hold up, right? Uh I I think that one of the things you're going to see, you know, transatlantic has been really strong through a lot of these airlines for a lot of the full service, Delta, American, United. Transatlantic travel is something you book with a lot longer lead time. Uh you know, so folks are just sort of waking up to the idea that their net worth is a bunch lower than it had been a month ago. I think as you get, you know, a month or two out, people are not going to be booking transatlantic travel. That's going to hurt a lot. Uh so I think Ed is starting to take actions based on the the trajectory we're on. Uh and and so, yeah, he's not going to set off an alarm right away, but he's obviously concerned, and that's why he's cutting capacity in the second half, and it it'll hurt the other other airlines in the market as well, right? I think Delta is one of the better performers on revenue. Uh and so my expectations is we'll see worse results from the rest of the US airline group because their revenues just won't hold up. They won't have the premium. Uh they won't have the loyalty programs to support them as well.
