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Delta Air Lines Cuts Profit Forecast, Triggering Airline Stock Decline

The airline cites economic uncertainty and reduced consumer confidence as key factors behind its revised outlook and sector-wide market impact.

Delta Airlines passenger jets are pictured outside the newly completed 1.3 million-square foot $4 billion Delta Airlines Terminal C at LaGuardia Airport in the Queens borough of New York City, New York, U.S., June 1, 2022. REUTERS/Mike Segar/File Photo
Delta Airlines planes sit parked at Hartsfield-Jackson Atlanta International Airport in Atlanta on June 28, 2024.
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Overview

  • Delta Air Lines reduced its first-quarter earnings forecast to $0.30–$0.50 per share, down from $0.70–$1.00, and cut its revenue growth projection to 3–4%, previously estimated at 7–9%.
  • The airline attributed the revised guidance to declining consumer and corporate confidence, driven by broader economic uncertainty and weakening domestic demand.
  • Delta's announcement led to a 13% drop in its stock price in after-hours trading, with other major airlines, including United and American Airlines, also seeing significant declines.
  • CEO Ed Bastian noted that while premium and international travel demand remains steady, domestic travel softness and recent aviation incidents have further impacted consumer sentiment.
  • The update comes ahead of the J.P. Morgan Industrials Conference, where airline executives are expected to discuss current demand trends and economic challenges.