Delta Air Lines Cuts Growth Plans Amid Trade Uncertainty
Delta Air Lines CEO Ed Bastian expressed concerns about President Donald Trump’s tariffs, calling them “the wrong approach” and acknowledging their impact on the airline’s business. As a result, Delta has decided to freeze its flying capacity for the second half of 2025, cutting its growth plans due to disappointing bookings. The airline also stated that it is unable to reaffirm its 2025 financial guidance at this time.
Last month, Delta revised its first-quarter forecast downward due to weaker-than-expected corporate and leisure travel demand. While the airline is still optimistic about profitability for the year, it has acknowledged that demand has been slower than anticipated. Delta had previously been confident about a strong 2025, with Bastian predicting it would be the “best financial year in our history.”
The decision to scale back growth plans marks a shift for Delta, which had started 2025 on a high note with expectations of continued strong travel demand. Bastian’s latest comments reflect broader concerns about consumers’ diminishing appetite for spending and the uncertain impact of trade policies under the Trump administration. A few months ago, Bastian had been more optimistic, suggesting the Trump administration’s regulatory approach could provide a “breath of fresh air.”
However, in the past six weeks, Delta has seen a decline in both consumer and corporate confidence, which has led to a slower-than-expected recovery in travel demand. Although January showed strong demand, Bastian noted that things “really started to slow” by mid-February. Main cabin bookings have weakened, especially as companies reconsider business travel and government workforce cuts impact overall demand. However, international and premium travel sectors have remained relatively resilient, with growth in these areas outpacing sales from economy class.
In terms of flying capacity, Delta had planned to expand by 3% to 4% in the second half of 2025, but now expects its capacity to remain flat compared to the previous year. Some future capacity reductions could affect markets like Canada, where U.S.-bound travel has declined, and Mexico, where demand for family visits has fallen.
Bastian also highlighted broader economic uncertainty caused by global trade tensions, which have stalled growth. Despite the challenging environment, Delta is focusing on what it can control, aiming to protect its margins and cash flow.
Delta was the first major U.S. airline to report earnings, with United, American, Southwest, and others expected to follow later this month. The airline’s stock initially rose after Trump’s announcement of a temporary reduction in some tariff rates. However, Delta’s shares have still fallen nearly 27% this year, despite a 23% increase after the tariff news.
In its first-quarter earnings report, Delta posted a net income of $240 million, up from $37 million in the same period last year. Revenue increased by 2% year-over-year, totaling $14.04 billion. The airline’s adjusted earnings per share were 46 cents, exceeding analyst expectations of 38 cents. Its adjusted revenue of $12.98 billion was in line with Wall Street’s expectations. However, tariffs and potential retaliatory duties could still increase costs for the U.S. aerospace industry, and Delta has said it will defer any Airbus aircraft affected by these tariffs.
Related News : https://suspicious-zhukovsky.67-21-117-18.plesk.page/?s=Delta+Air
Sources: AirGuide Business airguide.info, bing.com, cnbc.com