What's happened
United Airlines and Delta Air Lines have revised their profit forecasts due to economic uncertainty stemming from President Trump's trade policies. United now predicts earnings between $7 and $13.50 per share, while Delta has halted planned expansions and expects a decline in revenue growth. Both airlines are grappling with weakening consumer demand.
What's behind the headline?
Economic Impact on Airlines
- Profit Forecasts: United Airlines has lowered its adjusted earnings per share forecast to between $7 and $13.50, reflecting a pessimistic outlook if the economy enters a recession. Delta has also halted its planned capacity expansions, indicating a cautious approach to managing costs.
- Consumer Demand: The airlines are experiencing a decline in consumer demand, particularly in domestic travel, which is crucial for profitability. Delta's CEO noted that growth has largely stalled due to economic uncertainties.
- Market Volatility: The airline sector is particularly sensitive to economic fluctuations, as travel is often one of the first expenses consumers cut during downturns. This volatility is compounded by the ongoing trade war, which has rattled investor confidence.
- Future Outlook: Both airlines are focusing on managing costs and protecting cash flow. The situation remains fluid, and further adjustments to forecasts may be necessary as economic conditions evolve.
What the papers say
According to Bloomberg, United Airlines has revised its earnings forecast due to increased volatility, now projecting adjusted earnings between $7 and $13.50 per share. Meanwhile, Delta Air Lines has decided to halt its planned flight expansions, with CEO Ed Bastian stating, "With broad economic uncertainty around global trade, growth has largely stalled." The NY Post highlights that both airlines are facing challenges from weakening consumer demand, which has led to a significant drop in airline fares. Business Insider UK notes that the airline industry is bracing for an earnings recession in 2025, as tariffs and economic uncertainty continue to impact travel demand.
How we got here
The airline industry has faced significant challenges due to President Trump's trade war, which has created economic uncertainty. Both United and Delta had previously forecasted strong growth but are now adjusting their expectations as consumer confidence wanes and bookings decline.
Go deeper
- What factors are influencing airline profitability?
- How are airlines managing costs during this downturn?
- What does the future hold for the airline industry?
Common question
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Why is Delta Air Lines Halting Flight Expansions?
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What Are the New EU Countertariffs on US Imports?
The European Union is set to implement countertariffs on U.S. imports starting April 15, 2025, in response to recent U.S. tariffs on steel, aluminum, and automobiles. This move raises questions about its impact on consumers and businesses in Europe, as well as the broader implications for US-EU trade relations.
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How Do Trade Policies Affect Travel and Airline Operations?
Trade policies can significantly impact international travel and airline operations. Recent developments, such as Delta Air Lines halting its flight expansion plans due to economic uncertainties linked to trade tensions, raise important questions for travelers and industry stakeholders alike. Understanding these dynamics can help travelers navigate potential challenges and costs associated with tariffs and trade policies.
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What are the Latest Developments in Airlines, Trade, and Natural Disasters?
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What are the latest tariffs announced by President Trump and their impact?
On April 15, 2025, President Trump escalated the ongoing trade war by announcing new probes into semiconductor and pharmaceutical imports. This move has raised concerns about the future of the U.S. economy and the reactions of various industries, particularly airlines. Below, we explore the implications of these tariffs and how they are affecting different sectors.
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How are Trump's tariffs affecting the US economy?
The economic landscape in the U.S. is shifting dramatically due to tariffs imposed by the Trump administration. As concerns about a potential recession grow, many are left wondering how these policies are impacting various sectors, including airlines and consumer spending. Below are some frequently asked questions that delve deeper into the economic implications of these tariffs.
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How Are U.S. Trade Policies Impacting Airlines and Shipping Costs?
Recent changes in U.S. trade policies are reshaping the landscape for airlines and shipping industries. With new fees targeting Chinese shipping and airlines adjusting profit forecasts, many are left wondering how these developments will affect travel costs and consumer prices. Below, we explore the implications of these trade policies and what they mean for everyday consumers and businesses.
More on these topics
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
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Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. It is headquartered in Atlanta, Georgia.
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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United Airlines, Inc. is a major American airline headquartered at Willis Tower in Chicago, Illinois. United operates a large domestic and international route network spanning cities large and small across the United States and all six continents.
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Edward H. Bastian is an American business executive. He is the ninth and current chief executive officer of Delta Air Lines, serving in this role since May 2, 2016.
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American Airlines, Inc. is a major American airline headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex. It is the world's largest airline when measured by fleet size, scheduled passengers carried, and revenue passenger mile.