NEWSLETTER
While delta airlines (Dal) In general, it is considered that it has one of the strongest perspectives among competitors, Atlanta -based airline is also not immune to many of the problems that the industry is currently facing.
On March 10, Delta reduced his profits of the first quarter in almost half to between a growth of 3% to 4%. In January, Delta's leadership predicted income growth of between 6% and 8% for the quarter ending on March 31. This means a gain of between 30 cents to 50 cents per share instead of the 70 cents previously predicted at $ 1.
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'Consumers don't like uncertainty': Delta CEO
The prediction that Delta published in a presentation of the SEC immediately sent Delta shares in more than 10% for a week. The actions of the airlines were opened to $ 50.33 on March 11.
In an episode of “Closing Bell” by CNBC, the CEO of Delta, Ed Bastian, denied the statements that the country was aimed at a recession, but confirmed that both leisure and corporate trips received a success amid the fears of the consumer of one.
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“Consumers in a discretionary business do not like uncertainty,” Bastian told the Aviation Phil Lebeau reporter “and although we believe that this will be a period of time that we spend, it is also something that we need to understand and reach quieter waters.”
Shuttersock
In his presentation before the SEC, Delta also said that “the perspectives have been affected by the recent reduction in the confidence of consumers and corporate caused by the greater macro uncertainty, promoting the softness of domestic demand.”
In other words, both individual travelers and companies sending employees to work trips are afraid to spend and observe what can be discouraged or cut completely. Competitors like United (Only) and American Airlines (AAL) I have also seen their actions fall in the midst of multiple reports that show a weakened consumer confidence.
This is a great drop in record gain of $ 1.4 billion that Delta reported in its latest profit report in December 2024. At that time, Bastian said the airline “feels quite well looking at the new year.”
'Employees who feel threatened are not spending money traveling': Bastian
When it was pressed on whether the Trump administration movements to cut government agencies were also affecting consumer confidence, Bastian confirmed that those who recently lost their work or fear that they can be “not spending money traveling.”
“Government contractors, the aerospace and defense business, certainly employees who feel threatened about whether they are going to have a job are not spending money traveling,” said Bastian.
More about trips:
- Trump begins the presidency with three executive orders that affect the trip
- Government problems Advision of new trips in the popular destination of the beach
- Another country has just issued a new visa requirement for visitors
With the end of winter traditionally it is always a slower period for the sale of tickets for airplanes, Bastian ended up saying that he hopes that travel numbers will collect again with the warmest months, even if they travel both in businesses and in many of the routes to Europe from the secondary cities of the United States that Delta launched last year depend on both the strong demand for travel and the confidence of consumers.
“We are starting to go to spring, we are beginning to go to summer,” Bastian continued even more. “(…) I think that much of the impact we saw on the quarter is transitory and that we will advance.”
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