Delta Air Lines’ chief executive, Ed Bastian, recently criticized tariff measures linked to President Donald Trump’s trade policy. He characterized these duties as misguided and indicated that the airline was forced to reexamine its plans for increasing flight operations later in the year. This announcement comes on the heels of a less-than-robust start to what had once been expected to become a record performance year.
The carrier made significant adjustments to its outlook after booking numbers fell short of expectations. In an earlier period, Delta had projected a more vigorous expansion for the second half of the year. Today, the company has abandoned those plans, opting instead to keep its flying capacity steady when compared with the previous year. Bastian’s remarks during a recent media session underline his concerns that the tariff strategy is adversely affecting travel demand and investor confidence.
For the upcoming second quarter, the airline now estimates that revenue either might drop by as much as 2% or grow by up to 2% over last year’s figures. Analysts had anticipated a modest growth near 1.9%, a projection that Delta’s new forecast challenges. In addition, adjusted earnings per share are now expected to fall within the $1.70 to $2.30 range, which contrasts with the average forecast of around $2.23 per share circulated by market experts.
Though Delta had confirmed ambitious financial targets for 2025 at a recent investor briefing, company executives now consider it too early to revise those goals. Despite the uncertainty in the short term, the airline maintains its confidence in delivering a profit for the current year. Not too long ago, Delta lowered its first-quarter outlook after travel demand from both corporate clients and leisure travelers weakened sharply. This decision marks a departure from earlier optimism when the airline’s outlook indicated what could have been one of its strongest years financially.
Earlier in the year, Mr. Bastian expressed confidence that travel demand was robust, a view that was supported by strong figures in January. Bookings in the main cabin, however, have since failed to meet earlier estimates. He explained that several companies are reevaluating the necessity of travel for business meetings, and that cuts in the government workforce have diminished overall market sentiment. His comments come as a signal that both consumer spending and business travel are reacting to a shifting economic environment that is affecting several industries.
In what was once an expectation of expansion, Delta had intended to boost its overall capacity by approximately 3% to 4% during the latter half of the year. Given the softer booking trends, the airline has shifted to maintaining the same level of capacity year over year. Analysts have pointed out that Delta’s announcement may mark the beginning of several similar capacity adjustments among other major carriers. Some of these changes might extend to routes servicing Canada, where travel toward the United States is in decline, and to flights bound for Mexico. Delta President Glen Hauenstein mentioned that while business travel remains relatively steady, trips undertaken by individuals visiting family or friends appear to have dropped.
Global trade uncertainty has left many companies reassessing their strategies. Mr. Bastian commented that overall growth in travel has nearly stalled, prompting Delta to prioritize the protection of profit margins and the careful management of cash flow. By concentrating on factors that the airline can directly influence, Delta is taking steps to mitigate the impact of broader economic fluctuations. Other major U.S. carriers are expected to release their quarterly reports later this month, which may further illustrate the scale of recent shifts in passenger traffic and operational planning.
Tariff measures, along with possible retaliatory duties, have raised concerns about potential increases in the cost of imported components critical to the aerospace industry. In light of these anticipated price hikes, Mr. Bastian announced that Delta would postpone any orders for Airbus aircraft that might be affected by these tariffs. Although Airbus manufactures airplanes in Europe, the company also relies on imported parts at its Mobile, Alabama facility—a factor that has contributed to the decision to defer new equipment acquisitions.
Reviewing its performance over the first three months ended March 31, Delta reported adjusted earnings per share of 46 cents—a figure that exceeded the 38-cent estimate expected by analysts. Total revenue adjusted to $12.98 billion matched forecasts, while net income surged to $240 million compared with $37 million during the same period last year. When the company’s refinery sales are set aside, Delta’s adjusted revenue and earnings figures indicate modest growth and a return to improved financial performance relative to previous projections.
Overall, these developments suggest that Delta Air Lines is responding cautiously to a market that appears to be undergoing a notable shift. The airline is recalibrating its capacity plans and financial guidance in light of recent variations in travel demand and changes in trade policy. By maintaining strict control over expenses and focusing on measurable areas within its influence, Delta aims to keep its profitability on track even as economic and policy uncertainties persist.
