Delta Air Lines has revised its expectations for the second half of 2025, citing disappointing bookings and external factors like President Donald Trump’s shifting trade policies. The airline announced that its second-quarter revenue could decline by up to 2%, or potentially grow as much as 2%, compared to last year. Wall Street had projected a 1.9% increase, signaling a significant slowdown in demand. The airline also forecasted adjusted earnings per share of $1.70 to $2.30, falling short of the analysts’ anticipated $2.23 per share.
Impact of Trade Policies on Corporate Travel
CEO Ed Bastian attributed the airline’s lack of growth to “the wrong approach” in trade policies, pointing to how they’ve created economic uncertainty. He noted that while corporate and leisure travel demand was strong in January, the situation significantly worsened by mid-February. Delta’s initial outlook for 2025 had been more optimistic, expecting a growth rate of 3% to 4% in flying capacity. However, the airline has now decided to maintain flat capacity year-over-year in response to the slowing global economy.
Delta also indicated that it is too early to update its 2025 financial outlook, despite already setting expectations at an investor conference. Bastian expressed caution in light of broader economic conditions, explaining that while demand remains “quite good,” there is a general slowdown affecting not only the airline but other sectors as well. The company did reaffirm its goal of maintaining profitability for the year.
Strain on Corporate Travel and Consumer Confidence
Corporate travel, in particular, has been impacted by the Trump administration’s actions, including government workforce reductions and general economic concerns. Bastian highlighted that while international and premium travel have been more resilient, the main cabin bookings are underperforming. Delta is adjusting its strategy to focus on maintaining strong margins and cash flow in an uncertain environment.
Despite the grim forecast, Delta showed some positive results for the first quarter of 2025. The airline reported a net income of $240 million, a significant increase from $37 million last year. Revenue for the quarter was up by 2% year-over-year, totaling $14.04 billion. Adjusted earnings per share were 46 cents, up 2% from last year, and adjusted revenue matched Wall Street’s expectations at $12.98 billion.
What The Author Thinks
Delta’s revised outlook and decision to freeze capacity expansion underscore the profound impact that economic uncertainty and trade policies are having on the airline industry. In particular, tariffs and shifting trade relationships are creating headwinds that could slow growth for years to come. For an industry that thrives on consumer confidence and corporate travel, these external factors are proving to be significant obstacles.
Featured image credit: Wikimedia Commons
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