A Delta Air Lines Airbus A330-900neo heads for the gate in Amsterdam in April 2024. (Photo by … More Nicolas Economou)
NurPhoto via Getty Images
Delta Air Lines on Wednesday generally confirmed the diminished expectations for U.S. airlines, which have become performers in a tariff drama.
“Growth has largely stalled,” Delta said Wednesday, as it became the first carrier to report first quarter earnings. It cited “broad economic uncertainty around global trade” as the cause for the showdown.
“Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook,” Delta said in a prepared statement, noting that it “will reduce planned capacity growth in the second half of the year to flat over last year.”
In a Wednesday morning interview on CNBC, Delta CEO Ed Bastian said the carrier is “taking second half growth out of our plan. We had expected to grow 4%.”
Bastian said that in the President Donald Trump’s first term, the administration had been “quite helpful” in addressing the problem caused by Mideast carriers Emirates, Etihad and Qatar dumping subsidized capacity in U.S. markets.
Referring to the tariff battle, he said, “Trying to do it all at the same time has created chaos. Everything a stall. There’s been a freeze. Our economy’s going to continue to lose steam.”
For Delta, he said, the biggest impact has been in the domestic market, where the carrier has its most price-sensitive passengers. As for international, he told CNBC host Phil LeBeau, “U.S. consumers are looking to go somewhere.” About 80% of Delta international sales are made in U.S. markets.
In the first quarter, Pacific revenue grew 16% on double-digit capacity growth, with unit revenue inflecting positive. Transatlantic revenue was up 5% over the prior year, with unit revenue up 8%. Latin America revenue grew 5% over prior year with modestly negative unit revenue growth.
During the quarter, net income was $240 million, up from $37 million in the same period a year earlier. Revenue rose 3% to $12.99 billion. Delta earned adjusted earnings per share of 46 cents, ahead of estimates of 38 cents. TRASM, or total revenue per available seat mile, fell 1%. Cost per available seat mile rose 2.6%.
However, American Express remuneration of $2 billion was a March quarter record, up 13% year-over-year
Looking ahead, current quarter revenue is expected to be between down 2% and up 2%. “2025 is playing out differently than we expected at the start of the year,” said President Glen Hauenstein, in a prepared statement. “As a result, we are adapting to current conditions while staying true to our long-term strategy.”
Bastian said Delta expects to retain its stature as the leading U.S. airline. “Given our position of strength, our bias toward action and the decline in fuel prices, Delta remains well positioned to deliver solid profitability and free cash flow for the year,” Bastian said in a prepared statement. “I expect that our financial results will continue to lead the industry.”
At the close on Tuesday, Delta shares were down 39% year-to-date. Shares were down about 1% in pre-market trading on Wednesday.
