Delta Air Lines Adjusts Outlook Amid US Tariff Uncertainty

Delta Air

Delta Air Lines has pulled its full-year 2025 financial forecast, citing concerns over uncertainty caused by ongoing US tariff disputes. The airline emphasized that with the lack of economic clarity, it is premature to provide an updated outlook for the year. This decision comes in the wake of the growing US tariff conflict with global trade partners.

US Tariff War Causes Concern

Delta's chief executive, Ed Bastion, noted that the airline had informed its aircraft supplier, Airbus, that it would not purchase planes if they included a tariff fee. "If you start to put a 20% incremental cost on top of an aircraft, it gets very difficult to make that math work," he said during an earnings call. The airline is focused on managing what it can control, including reducing planned capacity growth for the second half of 2025.

Impact of Trade Disputes on Bookings

Delta's corporate travel segment began the year with momentum but faced a slowdown in February and March. This reduction in corporate confidence led to lower growth rates for the airline, particularly in its corporate sales, which increased by low-single digits. Delta noted that corporate strength was driven mainly by the banking and technology sectors. The airline has also seen a significant drop in bookings from Canada due to trade tensions with the country, while its operations in Mexico have shown mixed results.

Despite these challenges, Delta has managed to remain resilient in certain areas. Premium, loyalty, and international bookings have helped offset softness in domestic travel. In terms of fuel costs, Delta experienced a decrease in expenses, with fuel prices dropping by 7% in the first quarter of 2025 compared to the previous year.

Financial Performance and Outlook

Delta’s financial results for the first quarter of 2025 showed significant improvement. The airline posted a profit of $240 million, a notable increase from the $37 million reported in the first quarter of 2024. However, despite this positive performance, the ongoing uncertainty regarding tariffs and trade relationships remains a significant concern.

The company’s revenue forecast for the second quarter of 2025 remains cautious, projecting a potential increase or decrease of 2% compared to the previous year. As Delta continues to navigate these challenges, the airline is focusing on maintaining margin protection and controlling costs and capital expenditures.