Delta Air Lines Cuts Guidance, Citing Lower US Consumer Confidence

Delta Air Lines said Monday (March 10) that macro uncertainty has softened demand in the domestic market.

In a press release issued ahead of the airline’s presentation at the J.P. Morgan Industrials Conference set for Tuesday (March 11), Delta said it revised its March quarter outlook downward compared to the guidance it provided Jan. 10.

The airline now expects its total revenue to grow 3% to 4% year over year during the March quarter, down from its earlier guidance of 7% to 9%, and its operating margin to be 4% to 5%, down from its previous guidance of 6% to 8%, according to the release.

“The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in Domestic demand,” Delta said in the release. “Premium, international and loyalty revenue growth trends are consistent with expectations and reflect the resilience of Delta’s diversified revenue base.”

When Delta announced its initial guidance for the first quarter in January, the company said in an earnings release that it was building momentum as it closed out 2024 and that demand trends accelerated through the fourth quarter of the year.

“With strength continuing into the new year, we expect March quarter adjusted revenue to be 7 to 9 percent higher than 2024 on growth in capacity and unit revenue,” Delta President Glen Hauenstein said in the Jan. 10 earnings release.

On Feb. 17, Delta Air Lines Flight 4819 crashed and landed upside down at Toronto Pearson International Airport. The airline’s response to the crisis — offering $30,000 to each of the 76 passengers involved — made headlines and sparked a debate about the adequacy of the compensation and its potential long-term effects on customer loyalty.

Delta CEO Ed Bastian told CNBC’s “Closing Bell” Monday that concerns about safety from that and other incidents in the airline industry “somewhat exacerbated the impact on us.”

Bastian attributed the softness in domestic demand to weaker consumer confidence among both leisure and business customers.

The Conference Board said Feb. 25 that worries about trade and tariffs led to February seeing the biggest monthly decline in consumer confidence since August 2021.