It has not been a particularly easy time to be an airline.
While Donald Trump eventually put a pause on the previously-issued tariffs for 90 countries, announcing them on April 2 led to public airlines having the single worst day on the market since the covid-19 pandemic in 2020.
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United Airlines (UAL) , American Airlines (AAL) and Delta Air Lines (DAL) shares all fell by over 10% in a single day.
In its earnings call for the first quarter of the year, the latter Atlanta-based carrier reported profit of $240 million or 37 cents per share. While generally good and certainly stronger than many of its floundering competitors, CEO Ed Bastian said that Delta could no longer reaffirm its past guidance for the year amid economic uncertainty.
Related: Delta, United stocks tank after tariffs
At the start of the year, it expected revenue in the quarter ending in June to rise between 7% and 9%.
“With broad economic uncertainty around global trade, growth has largely stalled,” Bastian said in an April 7 statement. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year.
Delta Air Lines airplanes are seen next to each other on an airport tarmac.
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Delta started 2025 predicting major growth (this is why things stalled)
Throughout January, Delta was still predicting what it hoped would be its best year in history. Back then, it expected revenue growth of between 6% and 8% for the last quarter, while what it actually recorded was 2%.
Both in the earnings call and in the past, Bastian has spoken about low consumer confidence as the reason behind the lower-than-expected numbers — fearing inflation and a potential recession, many travelers are cutting back on spending and putting off discretionary trips. Businesses are also hesitant to send employees on any corporate travel that can be avoided.
Bastian further said that while he expects “solid” profitability and “meaningful” cash flow for the rest of 2025, the fluctuations of the current administration make it “premature” to provide any meaningful outlook for the full year.
More on travel:
United Airlines places big bet on new flights to trendy destinationGovernment issues new travel advisory on popular beach destinationAnother country just issued a new visa requirement for visitors
For the second quarter in June, Delta is forecasting profits of $1.70 to $2.30 per share as well as total revenue of between 2% lower and 2% higher from 2024.
Given that many of its competitors are reporting quarterly losses, Delta stock soared by 6% immediately after the earnings were released. Shares then saw a further boost after Trump repealed his plan to institute tariffs (they are still down 25% since January). Despite the fluctuation, Delta is better positioned to withstand rocky months or even years than airlines with a worse balance sheet.
“Full-service airlines have healthier balance sheets overall,” Tom Fitzgerald, an airlines analyst with TD Cowen, told TheStreet. “Delta has billions of dollars in unencumbered assets that it can borrow against to source liquidity if it needs to in this environment and the legacies also have pretty attractive loyalty programs that are generating billions in revenue at very high margins.”
The index for U.S. airlines, NYSE Arca Airline, is down just over 31% year-over-year.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
