Airline scales back long-term earnings forecast amid soft demand, while Q3 guidance and premium seat sales beat expectations
Delta Air Lines (DAL) cut its 2025 profit forecast on Thursday, citing softer-than-expected demand and overcapacity in the airline industry. The carrier now expects adjusted earnings of $5.25 to $6.25 per share for 2025, down from its previous forecast of more than $7.35 made in January.
Despite the lowered long-term outlook, Delta’s third-quarter guidance exceeded Wall Street expectations, boosting investor confidence. The company projects Q3 adjusted earnings per share of $1.25 to $1.75, compared with analysts’ forecast of $1.31. Revenue is expected to be flat to up 4%, ahead of the 1.4% increase projected by analysts.
Delta shares jumped 10% in premarket trading following the announcement, with other airline stocks rising in tandem.
CEO Ed Bastian said summer travel remains strong, but consumer behavior has shifted. Travelers are booking flights closer to their departure dates, which has affected Delta’s yield management strategy. “People are still traveling,” Bastian noted. “They’ve just adjusted their booking patterns.”
In the second quarter, Delta reported adjusted revenue of $15.51 billion, slightly beating estimates, and net income of $2.13 billion, or $3.27 per share, up 63% year-over-year. Premium seat sales rose 5%, while main cabin sales dropped 5%. Delta’s lucrative partnership with American Express also contributed $2 billion, up 10% from a year ago.
Bastian emphasized Delta’s continued investment in premium offerings, citing upgrades to lounges and onboard experiences. Corporate travel has stabilized but remains flat compared to last year, missing initial growth targets.
Delta plans to make “surgical” capacity cuts after the peak summer season ends in mid-August, aligning with an industry-wide shift to match supply with fluctuating demand.
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