Delta CEO sounds alarm about industry travel shifts

The Atlanta-based airline cut its earnings forecast on March 10.

Mar 11, 2025 - 16:02

Delta CEO sounds alarm about industry travel shifts

While Delta Air Lines (DAL) is generally considered to have one of the strongest outlooks among competitors, the Atlanta-based airline is also not immune to many of the problems currently facing the industry.

On March 10, Delta cut its first-quarter earnings outlook in nearly half to between 3% to 4% growth. In January, Delta leadership predicted revenue growth of between 6% to 8% for the quarter ending on March 31. This means a profit of between 30 cents to 50 cents a share rather than the previously-predicted 70 cents to $1.

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'Consumers do not like uncertainty': Delta CEO

The prediction that Delta published in an SEC filing immediately sent Delta stock down by more than 10% from a week ago. Airline shares opened at $50.33 on March 11.

In an episode of CNBC's "Closing Bell", Delta CEO Ed Bastian denied claims that the country was headed into a recession but confirmed that both leisure and corporate travel took a hit amid consumer fears of one.

"Consumers in a discretionary business do not like uncertainty," Bastian told aviation reporter Phil LeBeau "And while we do believe this will be a period of time that we pass through, it is also something that we need to understand and get to calmer waters."

Delta recently slashed its earnings outlook for the quarter ending on March 31.
Shutterstock

In its filing to the SEC, Delta also said that "the outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in domestic demand."

In other words, both individual travelers and businesses sending employees on work trips are afraid to spend and looking at what can be put off or cut entirely. Competitors such as United (UAL) and American Airlines (AAL) have also seen their stock drop amid multiple reports showing weakened consumer confidence.

This is a stark drop from the record profit of $1.4 billion that Delta reported in its last earnings report in December 2024. At the time, Bastian said that the airline "feel[s] quite good looking into the new year."

'The employees that feel threatened are not out there spending money traveling': Bastian

When pressed on whether the Trump administration's moves to slash government agencies were also impacting consumer confidence, Bastian confirmed that those who either recently lost their jobs or fear that they may be next are "not out there spending money traveling."

"The government contractors, the aerospace and defense business, certainly the employees that feel threatened as to whether they're going to have a job are not out there spending money traveling," Bastian said.

More on travel:

With late winter traditionally always a slower period for plane ticket sales, Bastian ended by saying that he expects travel numbers to pick back up again with the warmer months even if both business travel and many of the routes to Europe from secondary U.S. cities that Delta launched last year depend on both strong travel demand and consumer confidence.

"We're starting to head into spring, we're starting to head into the summer," Bastian continued further. "[...] I think a lot of the impact we saw in the quarter is transitory and that we'll push through."