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Delta Air Lines ‘ steep first-quarter guidance cut indicates the rising lack of confidence consumers and corporations have on the economy, according to Bank of America. The company slashed its outlook for the current quarter, citing weak demand and a “recent reduction in consumer and corporate confidence caused by increased macro uncertainty,” according to its recent securities filing. “The macroeconomic uncertainty is unfolding in real time as DAL (Delta) is the first airline to cut its 1Q25 revenue growth outlook by 400-500bps to +3-4% from +7-9%,” BofA analyst Andrew Didora wrote in a note on Monday. “We knew February was soft following our AAL (American Airlines) headquarters visit in late February, but this cut was deeper than expected.” Shares of Delta have tumbled about 12% over the past two days, and have shed nearly 23% year to date. DAL 1D mountain Delta shares on Tuesday “Well, sometimes the market is telling you something; lower airline stock prices were indeed a forward indicator of softer demand,” Barclays analyst Brandon Oglenski said in a research note on Monday. “Weakness is no longer a debate,” Oglenski said, highlighting the softness in corporate travel revenue. As examples, he highlighted government-related travel across industries such as defense, autos and media, which have fallen. There is a high chance other major airlines will also lower their near-term forecasts, Oglenski added. Delta’s bearish outlook may also portend difficult times ahead for the broader travel industry. Lodging and cruise stocks will also likely experience “a little disturbance,” Bernstein’s Richard Clarke wrote Tuesday. “There is no escaping the current direction of travel, and any expected boost to travel from a Trump presidency is instead being replaced by a slowdown in confidence for both Leisure & Business,” said Clarke.
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