Today, Delta’s shares dropped by 10% after the airline revised its first-quarter guidance due to a decline in domestic demand. Rival airlines, such as United and American Airlines, also fell by as much as 6%.
Ed Bastian, Delta’s CEO told the media, “Consumer spending started to stall. Largely domestic, largely in the close-in. But it was also exacerbated, as you know, the uncertainty that’s out there and consumers in a discretionary business do not like uncertainty. And while we do believe this will be a period of time that we pass through, it is also something that we need to understand and get to calmer waters.”
When asked if the drop in government spending has affected the forecast, Bastian replied: “Yeah, I’d say to a modest degree. You know, the government contractors, the aerospace and defense business, certainly the employees that feel threatened as to whether they’re going to have a job are not out there spending money traveling.”
Delta now anticipates a profit ranging from 30 cents to 50 cents per share, in contrast to its earlier estimate of 70 cents to $1.
By CEO NA Editorial Staff
