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Delta sees sharp volatility in Q2 revenue

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Airline says full-year financial forecast remains

uncertain

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Bookings for domestic travel have softened

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Company slashes capacity growth plans

By Rajesh Kumar Singh

CHICAGO, April 9 (Reuters) - Delta Air Lines ( DAL ) on

Wednesday forecast a lower-than-expected profit in the current

quarter, saying travel demand has "largely stalled" due to

economic uncertainty caused by U.S. President Donald Trump's

sweeping tariffs.

The Atlanta-based company also did not affirm its full-year

financial forecast, citing a fluid macroeconomic environment.

U.S. consumer and business confidence has sharply weakened

as the tariffs on imports from most of the world have brought in

the specter of higher inflation and slower economic growth.

Global brokerages have raised their odds for an economic

recession.

With travel a discretionary item for many consumers and

businesses, growing risks of a downturn have clouded the airline

industry's outlook and sparked a selloff in shares.

"With broad economic uncertainty around global trade, growth

has largely stalled," Delta CEO Ed Bastian said in a statement.

"Given the lack of economic clarity, it is premature at this

time to provide an updated full-year outlook."

Delta expects a profit in the range of $1.70 a share to

$2.30 a share in the quarter to end-June. The midpoint of the

forecast is $2 per share, compared with analysts' average

estimate of $2.30 per share, according to LSEG data.

Underscoring the uncertainty, Delta said its total revenue

in the second quarter would be down 2% to up 2% from a year ago.

Bookings from both leisure and corporate customers have

softened, hitting the demand for domestic travel, it said.

Demand for premium and international travel, however, has

remained resilient.

Delta reported an adjusted profit of 46 cents a share in the

first quarter, compared with its previously revised profit

estimate of 30 cents to 50 cents a share. Last month, the

company had slashed its March quarter profit estimate by half on

mounting economic worries.

The airline's shares have lost 41% this year and are down

50% from their 52-week high. Similarly, rival United Airlines'

stock has slumped 68% from its 52-week high.

The broader NYSE Arca Airline index has declined 31%

this year, underperforming the broader S&P 500 index.

Delta was the first major U.S. carrier to report its

earnings. United is due to report its first-quarter results on

April 15.

Analysts expect similar commentary from Delta's rivals.

Major carriers last month cut their first-quarter earnings

estimates, saying rising economic uncertainty has led to a

pullback in corporate and consumer spending.

SOFTENING DEMAND, SELF-HELP MEASURES

Some indicators are signaling more pain ahead. Air tickets

sold through third-party online travel agencies for summer

travel to Europe are down about 13% from a year ago, according

to aviation analytics firm Cirium.

With demand slowing, U.S. airlines have started culling

flights to avoid lowering fares and protect margins.

Delta said on Wednesday it is reducing its planned capacity

growth in the second half of the year to flat from a year ago.

It previously expected to grow capacity by 3%-4%.

Bastian said the company was also "actively" managing costs

and capital expenditures. "In this slower-growth environment, we

are protecting margins and cash flow by focusing on what we can

control," he said.