Delta Air Lines Cuts Q1 Forecast, Shares Plunge Amid Demand Concerns

SEATTLE, Washington – Delta Air Lines has significantly reduced its revenue and profit forecasts for the first quarter of 2025, indicating a troubling trend in domestic demand. The airline anticipates a revenue increase of no more than 5% compared to last year, a sharp decline from previous estimates of 6% to 8% growth.

In an announcement made late Monday, Delta slashed its adjusted earnings predictions to between 30 cents and 50 cents per share, down from an earlier guidance of 70 cents to $1 per share. Following this revelation, Delta’s stock experienced a substantial drop, falling over 13% in after-hours trading after a more than 5% decrease during the regular session.

Delta’s revised outlook is attributed to a recent decline in both consumer and corporate confidence, which has led to a notable decrease in bookings for leisure and business travel. “The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in domestic demand,” Delta stated in its securities filing.

CEO Ed Bastian, in an interview with CNBC, stated that while he does not expect an impending recession, signs of weakened consumer confidence have emerged. He noted a collective pullback among leisure and business customers, further emphasizing that “safety concerns somewhat exacerbated the impact on us” after a fatal midair collision involving a regional jet and an Army helicopter in January, as well as another recent incident in Toronto.

This announcement comes just one day ahead of a JPMorgan airline industry conference where executives from various airlines, including American Airlines and United Airlines, are expected to share their insights on current demand trends. Delta’s forecast, delivered post-market closure, has heightened scrutiny on the airline industry, which showed resilience in the months following the COVID-19 pandemic.

Despite the downturn in domestic travel demand, Delta affirmed that its expectations concerning premium and international travel demand, as well as loyalty revenue growth, remain stable. Bastian’s comments come amid a broader market sell-off that has seen airline stocks generally suffer as consumer spending appears to be softening across multiple sectors.

The retrogression in Delta’s financial outlook not only underscores the challenges facing the travel sector but also serves as a warning sign for potential impacts on flight availability and pricing for travelers, particularly in Canada, as the industry grapples with consumer uncertainty.

As Delta’s shares continue to reflect broader market trends and the industry adjusts to changing consumer patterns, the airline faces a critical period ahead. The future of the airline industry remains in question as executives prepare to address stakeholders at the upcoming conference.