Delta CEO highlights that Trump’s tariffs are impacting reservations, leading the airline to withdraw its 2025 outlook.

Delta Air Lines will not be expanding its flying capacity in the second half of the year due to disappointing bookings amid President Donald Trump’s shifting trade policies, which CEO Ed Bastian referred to as “the wrong approach.” On Wednesday, Delta forecasted its second-quarter revenue to decline by up to 2% or grow as much as 2% compared to the previous year, while Wall Street had been anticipating a growth of 1.9%. The airline expects adjusted earnings per share to be between $1.70 and $2.30, compared to analysts’ estimates of $2.23 per share.

The carrier has also indicated that it is too early to update its financial guidance for 2025, a month after confirming its targets at an investor conference; however, the airline stated that it still expects to be profitable this year. Last month, Delta revised its first-quarter earnings outlook downward, citing weaker-than-expected demand for corporate and leisure travel.

This marks a shift for Delta, the most profitable airline in the U.S., which began 2025 optimistically, believing it would be another year of strong travel demand, with Bastian previously predicting it to be “the best financial year in our history.” His recent comments reflect increasing concern among CEOs regarding consumers’ diminishing appetite for spending and the impact of certain policies from the Trump administration. In November, Bastian commented that the administration’s approach to industry regulation would likely be a “breath of fresh air.”

Wall Street analysts have lowered their earnings estimates and price targets for airlines in recent weeks due to concerns over slowing demand. “In the last six weeks, we’ve seen a corresponding reduction in broad consumer confidence and corporate confidence,” Bastian shared. He noted that demand was “quite good” in January but began to “really slow” around mid-February.

Bastian mentioned that main cabin bookings are weaker than previously anticipated, indicating that travel demand, which had been growing by about 10% at the beginning of the year, has slowed as some companies reconsider business trips amidst government workforce reductions and market volatility. The White House did not immediately provide a comment on the situation.

According to Bastian, international and premium travel have remained relatively resilient. Initially, Delta planned to expand its flying capacity by approximately 3% to 4% in the latter half of 2025, but now the carrier will maintain flat capacity year over year.

“We anticipate this to be the first of many capacity reduction announcements from airlines this quarter,” TD Cowen airline analysts Tom Fitzgerald and Helane Becker noted following Delta’s outlook release.

“With broad economic uncertainty surrounding global trade, growth has primarily stalled,” Bastian stated in Wednesday’s earnings release. “In this slower-growth environment, we are safeguarding margins and cash flow by concentrating on what we can control.” Delta is the first of the major U.S. airlines to report earnings, with United, American, Southwest, and others scheduled to follow later this month.

Here’s how the company performed in the three months ending March 31, compared to Wall Street expectations, based on consensus estimates from LSEG:

• Earnings per share: 46 cents adjusted vs. 38 cents expected
• Revenue: $12.98 billion adjusted vs. $12.98 billion expected

In the first quarter, Delta’s net income increased to $240 million, up from $37 million last year, with revenue rising by 2% year over year to $14.04 billion. Excluding Delta’s refinery sales, the airline reported adjusted earnings per share of 46 cents, marking a 2% increase from the previous year and exceeding analysts’ expectations, along with adjusted revenue of $12.98 billion, which also represented a 3% increase from last year and was in line with expectations.