Delta Air Lines cut its first quarter revenue guidance on March 10, 2025, driven by a softness in domestic demand.
Revenues for the March-ending quarter are expected to be up 3-4% compared to first quarter 2024, pulled back from its January guidance of a 7-9% increase.
“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 read in a filing.
Company CEO Ed Bastian said at the JP Morgan Industrials Conference that a number of factors impacted the results, including customer confidence and, as a result, companies started to pull back in corporate spending. “We saw a pretty immediate stall in both corporate travel and booking,” said Bastian. “Not that they stopped, but the growth rates have been stalled considerably."
In addition, Bastian added that the American crash in January and Delta's own incident in February had exacerbated the impact on Delta. “Consumer confidence in air travel certainly waned,” said Bastian.
Delta said the impact is estimated to be around $500 million to the company. “It's about 4% less than what we were anticipating,” said Bastian. “About $250 million of that we really believe is transitory. Those are costs that we saw during the quarter that were moving through the quarter and we don't anticipate continuing to repeat going forward.” Around $100 million was from the extreme snow and ice event in Atlanta, as well as some impact from California wildfires.
Bastian said he believed the “real impact” is, then, $250 million. “The $250 million is something we've got to address as we move forward into the second quarter and beyond in 2025,” he said.
The company expects earnings of between 30 and 50 cents per share, down from between 70 cents and $1. Operating margin is expected to increase around 4-5%, down from previous guidance of a 6-8% increase. Bastian said at the event that the company expects margins will continue to expand throughout the year despite the “slow start” in the first quarter.
However, the company’s premium, international, and loyalty revenue growth trends have remained in line with the company’s expectations. Bastian also noted that oil prices are down by $10 a barrel. These factors are supporting Delta as it maintains its full year guidance.