Delta Air Lines CEO Ed Bastian announced plans to reduce capacity later this year amid increasing economic uncertainty.
Domestic routes, particularly the low-fare main cabin, are expected to be most affected, impacting both personal and corporate travel. International routes, premium seating, and diverse revenue sources like loyalty programs remain robust. Delta will decrease domestic main cabin supply to maintain seat availability at nearly the same level as last year, responding to demand and supply.
The second quarter has been almost unaffected, but there is anticipated impact on demand, especially from August in the third quarter. While fourth-quarter sales are forecasted to be $1.5 to $2 billion, it’s too early to revise the full year outlook.
Bastian addressed economic slowdown concerns, saying, “For the past two decades, every time the economy has faced some disturbance, we’ve taken the right actions to move forward and seize opportunities, putting Delta in a favorable position. Comparing Delta Air Lines 20 years ago to today, there’s no comparison. So, even in this tough situation, I’m confident there are opportunities.”
Regarding the impact of tariffs on equipment purchases, Bastian stated, “We do not intend to pay tariffs on any aircraft deliveries. This era is quite uncertain, and adding a 20% cost to an aircraft makes calculations extremely difficult.” Delta plans to receive only Airbus aircraft this year.
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