Delta pulls full-year forecast amid US tariffs: Update

Market: Metals, Oil products
09/04/25

Adds details from earnings call throughout.

Delta Air Lines pulled its full-year 2025 financial guidance today, citing US tariff-related uncertainty.

"Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook," the airline said Wednesday in an earnings call.

Delta said it hoped the growing US tariff war with the world would be resolved through trade negotiations, but that it also told its main aircraft manufacturer, Airbus, that it would not purchase any aircraft that includes a tariff fee.

"If you start to put a 20pc incremental cost on top of an aircraft, it gets very difficult to make that math work," chief executive Ed Bastion said in an earnings call today.

In the meantime, Delta is protecting margins and cash flow by focusing on what it can control, including reducing planned capacity growth in the second half of the year to flat compared to last year, while also managing costs and capital expenses, Bastion said.

Delta expects revenue in the second quarter of 2025 to be either 2pc higher or 2pc lower from the year earlier period with continued resilience in premium, loyalty and international bookings offsetting softness in domestic and standard flights.

Punitive taxes on imports from key US trading partners were implemented on Wednesday despite President Donald Trump's claims of multiple trade deals in the making. Trump's 10pc baseline tariff on imports from nearly every country already went into effect on 5 April. The higher, "reciprocal" taxes went into effect today, although at midday Wednesday he announced a 90-day pause on most of the higher tariffs, while increasing tariffs on Chinese imports even higher.

The company reported a profit of $240mn in the first quarter of 2025, up from $37mn in the first quarter of 2024.

Confidence craters in 1Q

Corporate travel started the year with momentum, but a reduction in corporate confidence stalled growth in February and March, Delta said. For the first quarter, corporate sales were up by low-single digits compared to the prior year, with strength led by the banking and technology sectors.

The company's fuel expenses were down by 7pc in the first quarter of 2025 compared to the prior year period. The average price Delta paid for jet fuel was $2.45/USG, down by 11pc to the prior year period.

Delta said it has seen "a significant drop off in bookings" out of Canada amid the trade disputes with that country which started earlier than the broader US tariffs. Meanwhile, Mexico is "a mixed bag," the company said.

Delta is considering reducing capacity levels in Mexico and Canada in the future.

The company reported a profit of $240mn in the first quarter of 2025, up from $37mn in the first quarter of 2024.

By Eunice Bridges

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