Delta Air Lines lowers profit outlook for weak demand

Delta on Monday cut its financial forecasts for the first three months of the year, and said rising economic concerns among businesses and consumers have reduced demand for domestic travel.

The airline warning was the latest indication that the US economy, or at least, perceptions of it, have been weakening due to changes in federal policies announced by President Trump.

Delta said it expects quarterly revenue to rise at least 3% from a year ago, down from its lowest 7% forecast just two months ago. Delta stock fell more than 5% in regular trading on Monday, and another 12% in extended trading after publishing updates.

“The outlook is affected by the recent decline in consumer and business trust caused by increased macro uncertainty and by promoting softness in domestic demand,” the airline said in its securities application. The airline released the update along with a presentation scheduled to be streamed at the JPMorgan Industrials Conference on Tuesday.

In addition to his weaker confidence, Delta said fewer passengers book flights in the short term. However, he added that expectations for revenue growth from luxury travel, international flights and loyalty programs have not changed.

The bad news wasn't a complete surprise. A financial analyst with Raymond James Savanti Sythe said in a memo last week that the airline may have lost momentum in February due to slowing government travel, bad weather and customer anxiety after a plane operated by its Delta subsidiary after landing in Toronto.

Still, Syth said the demand for flights through spring break remained strong, and other airlines were unable to benefit from the cost of the Delta.

While some airlines have faced a variety of challenges recently, Delta and several others have benefited from the strong demand for premium plane seats and international flights.

Delta said in January that it had recorded revenues of more than $15.5 billion in the last three months of last year. At the time, its CEO, Ed Bastian, said Delta was on track to “delta's highest fiscal year in its 100-year history.” Last month, employees said they would receive an average of five weeks of salary for profit sharing.

But economic fears have risen in recent weeks amid the fear of a trade war. Wall Street had its worst day Monday after Trump refused to rule out the possibility that his policies could cause a recession.

Other large airlines, including American Airlines, United Airlines and Southwest Airlines, are also scheduled to announce updates at JP Morgan meeting on Tuesday.