Delta warns of ‘economic uncertainty’ and ‘stalled growth’ in new recession alarm bell

By Chris Isidore, CNN

(CNN) — Delta Air Lines warned that revenue could fall in the current quarter and that “growth has largely stalled,” as its CEO warned that he’s concerned the economy is likely to fall into a recession.

The airline attributed the weakness in its guidance to “broad economic uncertainty around global trade.” It said due to the change in economic condition, it is no longer standing behind previous guidance that it expected record profits in 2025. And it is dropping plans to offer more seats to passengers later this year, as it sees both businesses and leisure travelers pulling back on travel plans due to the uncertainty.

Asked during an interview on CNBC Wednesday morning if he still believes the US economy will avoid a recession, Delta CEO Ed Bastian said he is worried that is no longer the case.

“I don’t know. I think we’re acting as if we’re going into a recession,” he said. “I think everyone is going into a defensive posture. As a result of that, if that continues, and we don’t get resolution soon, we’ll probably end up in a recession.”

The comments and change in plans and outlook by Delta are a sign that even companies that are not facing a direct impact from tariffs are being impacted by the uncertainty in the US economy that the tariffs have caused.

Delta isn’t the only company backing off guidance because of the tariff battles. Walmart, the nation’s largest retailer, pulled its guidance for the current fiscal quarter on Wednesday, although it did reaffirm its full-year sales and profit guidance.

Business travel is ‘one of the easiest things to minimize’

Delta is seeing the greatest impact on bookings of lower-fare seats, and not as much on premium seating. But the company’s executives also said that business travel — which had been growing at about a 10% annual rate at the start of the year — is now flat compared to a a year ago, as businesses pull back on their own travel plans.

“In a period of maximum or potentially maximum uncertainty, all companies do what they can to make sure they protect their future,” Bastian told investors on a conference call later Wednesday morning.

“Historically, corporate travel has been the first thing, one of the easiest things, to minimize if you’re a company,” he added. “If we continue on in this elongated sense of uncertainty, no question: You’ll see continued reductions in corporate travel.”

Delta said Wednesday it is dropping its earlier plans to increase its “available seat miles” — an industry term for the number of seats it sells, adjusted for the miles those seats are flown. Now the company expects that figure to be flat year-over-year.

The airline also expects its own employment level in 2025 to be down from 2024 levels, though executives said that would be done through normal attrition caused by retirement and other voluntary departures, and not any layoff of staff.

“Right now, it’s hard to know how this is going to play out, given that this is somewhat self-imposed,” he said in his comments to investors. “I’m hopeful that sanity will prevail and we’ll move through this period of time on the global trade front relatively quickly.”

The company reported that revenue in the just-completed quarter grew 3.3%, in line with recently reduced guidance for the period. It had started the quarter expecting revenue to rise between 7% and 9%.

Now Delta expects its second-quarter revenue, which includes the start of the summer travel season, to be between a gain of 2% and a decline of 2%. Delta also trimmed expectations for its quarterly profit margin, even as it expects to benefit from lower fuel costs.

This story has been updated with additional reporting and context.

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