Delta Air Lines cuts revenue outlook and sends stocks

Delta Air Lines It significantly reduced its first quarter revenue and profit outlook, citing declining domestic demand, and supported growing concerns about poor sales in some corners of the travel industry.

Delta expects revenue for the quarter ending March 31 to rise above 5% from growth of 6% from forecasts in January. This reduced adjusted earnings forecasts to 30 cents from previous guidance to 70 cents per share to 50 cents per share. Delta shares were above 13% in after-hours trading after falling more than 5% in regular sessions on Monday.

“The outlook is affected by the recent decline in consumer and business trust caused by increasing macro uncertainty and by promoting softness in domestic demand,” Delta said in his securities application.

Delta CEO Ed Bastian told CNBC’s “Closing Bell” on Monday that he doesn’t expect a recession, but consumer confidence has weakened and both leisure and business customers have returned to bookings.

He said safety concerns “had aggravated some of the impact on us” after a fatal air collision between a regional jet and an Army helicopter in Washington, DC last month after a Delta crash at landing in Toronto last month.

Bastian’s comments come after a wide range of market sales.

The Delta forecast provided after the market closed on Monday is the day before the JPMorgan Airlines Industry Meeting, where CEOs are expected to update investors on current demand trends. In its filing, Delta said demand for premium travel, international travel and loyalty revenue growth is still in line with that expectation.

American Airlines, Southwest Airlines and United Airlines Wall Street on Demand trends are one of the other carriers who also update.

Airlines’ shared prices have fallen significantly into the sector as there are increasing signs that consumer spending is weaker. This has been resilient compared to other industries in the wake of the Covid-19 pandemic.