Delta slashes earnings forecast as domestic demand weakens

Delta Air Lines significantly reduced its first-quarter 2025 earnings and revenue guidance, citing a decline in consumer and corporate confidence. The airline now expects revenue growth of just 3 to 4 percent, down from its initial projection of 7 to 9 percent, and adjusted earnings per share between 30 to 50 cents, a steep drop from its earlier forecast of $1 per share.

The carrier attributed the slowdown to "increased macro uncertainty," which has softened demand for domestic travel. However, Delta’s premium, international, and loyalty revenue streams remain stable, suggesting that corporate cutbacks and shifting economic sentiment are primarily affecting domestic operations.

The revised outlook, disclosed in an 8-K filing ahead of Delta’s presentation at the JP Morgan Industrials Conference, sent its stock plunging over 14 percent in after-hours trading. Competitors United Airlines and American Airlines also saw share price declines, as reported by Skift.

Delta CEO Ed Bastian, speaking on CNBC, acknowledged a “significant shift” in GDP sentiment starting in February, leading to a pullback in corporate and consumer spending. Federal government layoffs and potential new tariffs have also contributed to broader economic concerns, according to a Deutsche Bank investor note cited by Skift.

While Delta’s latest financial revision marks the first major airline to signal economic trouble, analysts are watching whether this slowdown will spread to other parts of the travel industry. With airlines already battling rising labor costs and softening demand, the second quarter may offer more clarity on whether this is a short-term dip or the start of a prolonged downturn.