Delta Air Lines executives say they believe the current slump in domestic air travel will pass soon, prompting the carrier to restore a full-year earnings forecast that it scrapped this spring amid market volatility.
The Atlanta-based carrier, which is the first major U.S. airline to report its earnings for the early summer travel season, is a bellwether for the state of an industry. The fortunes of commercial airlines are tied to travel budgets that are often reduced at times, such as now, of economic uncertainty.
Low consumer confidence and high volatility in the stock market following the shifting U.S. tariff policies quelled travel. Federal Reserve data shows the nation’s economy shrank in the first quarter, but both sentiment and the stock market have stabilized recently, boosting airline optimism.
Delta fashions itself an airline for business travelers or more affluent leisure passengers. The airline’s executives said its target customer comes from a household making at least $100,000 per year and is less likely to feel the financial strain that budget-conscious travelers may experience.
Yet, like its peers, Delta’s ambition for 2025 is lower than it was at the start of the year.
In January, the airline predicted that a travel hot streak would deliver record profits and continue to lift an industry walloped by the COVID-19 pandemic only a few years ago. Then, in April, threats of hefty tariffs and broad uncertainty about the U.S. economy’s trajectory led Delta executives to toss out financial projections for the full year.
On Thursday, the airline restored its full-year guidance, bringing with it a more measured outlook. Delta now expects to close out the year with $6.25 earnings per share at best, after forecasting upward of $7.35 per share in January.
The airline reported consensus-beating profits Thursday as demand remained strong for its premium and loyalty products, which made up for a dip in seats sold in the main cabin.