Uncertainty around global trade is clouding Delta Air Lines Inc.’s outlook for the rest of 2025, execs for Atlanta’s largest private employer said during their March earnings call.
Market swings and “stalled” growth spurred by a spate of Trump tariffs —some launched, others retracted or delayed, could lead to fewer flights in the latter half of the year.
The outlook is a stark change from just last quarter, when the airline predicted “strong demand for travel to continue” and announced new routes to places like Morocco and multiple destinations in the Caribbean.
While making broad projections is challenging amid recent volatility, CEO Ed Bastian said in a release that the airline is “focusing on what we can control.”
“This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures,” Mr. Bastian said.
He guessed profits would be at between $1.5 billion and $2 billion in the June quarter “on revenue that is essentially flat to last year.”
According to a corrected transcript of the earnings call, Delta President Glen Hauenstein said the airline will be “eliminating unprofitable flying,” wherever it can be found in the network. It’s unclear how that could affect Delta’s growing international route map from Atlanta, which the airline said last week would expand with new flights to St. Vincent and the Grenadines and Grenada in December.
Canada, where some travelers have begun boycotting the U.S., and Mexico could be in for reductions. Mr. Hauenstein said discretionary travelers in those markets are cutting back even amid (so far) sturdy business demand.
The airline still boasts strong transatlantic bookings for the summer peak season, he added. Adding to the resiliency of its international market, 80 percent of Delta’s cross-border bookings originate from the U.S., potentially shielding the company from any reductions in demand originating in Europe and Asia.
Mr. Hauenstein gave little detail on planned capacity cuts in the second half of 2025, other than to say that the schedule is largely intact for the second quarter, with cuts beginning in August and targeted to the Southeast U.S., where school starts earlier.
In the first quarter, international revenue grew 7 percent, becoming a source of strength along with loyalty and premium revenue; domestic revenue grew just 1 percent amid persistent“softness” in the main cabin, which Mr. Hauenstein said has yet to bleed into the higher-margin aspects of the business. The company is keeping a “close eye” on that given how much wealth was wiped out of the markets in early April.
Traffic in the Pacific lane, principally to Seoul, where Delta is partnered with Korean Air, and Tokyo, was up 16 percent in the first quarter compared to the same period in 2024.
The execs said Delta has little direct exposure to tariffs, with 85 percent of its overall cost basis being spent toward services and its goods being sourced mostly domestically. Cargo revenue, which was up 17 percent this quarter, could be reduced if trade flows fall.