The Atlanta-based airline is the first major US carrier to report that mounting economic worries among consumers and businesses are hurting domestic travel.
Delta Air Lines on Monday slashed its first-quarter profit estimates by half, sending its shares down 14%, and its CEO said the environment had weakened due to US economic uncertainty.
Since travel spending closely tracks broader economic activity, investors and analysts say a downturn would spell trouble for the airline industry. Carriers’ revenue from government has already taken a hit due to a Delta now expects a profit in the range of 30 cents to 50 cents a share, compared with previous estimates of 70 cents to $1 provided in January.
Investors and analysts had suggested that Delta’s more affluent and diversified customer base meant it was better-positioned to deal with weaker demand. But Bastian said the company was seeing softness in booking from the aerospace and defense, autos, media, entertainment and tech industries.In a note this month, analysts at Deutsche Bank warned that an emerging economic “soft patch” had put a question mark on the industry’s revenue estimates.
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