Delta Air Lines pulls guidance for record profits due to trade war

Delta Air Lines has pulled its guidance for record profits this year, blaming “a lack of economic clarity” about the fallout from President Donald Trump’s sweeping tariffs, as major US businesses weigh the damage from a deepening trade war. The Atlanta-based carrier on Wednesday went from forecasting its best financial year in January to warning of rising uncertainty from an escalating global trade war that is hurting already fragile consumer confidence. Presenting quarterly results on Wednesday, CE Ed Bastian said it would be “premature” to update the airline’s full-year guidance, having previously forecast pre-tax profits of $6bn this year. As US earnings season begins, the update offers an early insight into how major companies are navigating Trump’s tariffs, coming on top of warnings from US airlines earlier this year about falling demand for domestic travel amid rising uncertainty about the economic outlook. In January, Delta said it was expecting record annual profits this year, amid passengers’ continued willingness to pay for premium seats. But two months later, it sounded the alarm on corporate and consumer spending and slashed its first-quarter sales and earnings forecasts. On Wednesday, Bastian said that “with broad economic uncertainty around global trade, growth has largely stalled”, adding that the airline was “protecting margins and cash flow by focusing on what we can control”. As part of that aim, Delta will hold flying capacity at last year’s level in the second half of the year instead of increasing it, as well as “actively managing costs” and capital expenditure. The update follows warnings of a slowdown from airlines including American Airlines, United Airlines and Southwest Airlines in March, spurred by reduced travel by government workers and rising uncertainty among US households, which now face higher prices as a result of Trump’s trade war.<br/>