Delta Air Lines has lowered its first quarter guidance on revenue growth amid a fall in US consumer and corporate confidence.
The seasonally most difficult three months of the year will see the carrier halve its projected growth rate from 8% to 3%-4% year-on-year – equivalent to about $500 million.
Delta said: “The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in domestic demand.”
However, there airline added: “Premium, international and loyalty revenue growth trends are consistent with expectations and reflect the resilience of Delta’s diversified revenue base.”
Chief executive Ed Bastian told US news channel CNBC that consumer confidence in the US “is coming down a little bit” and that is why the market “is in the challenge that it is”.
He added: “As a result of that, we saw companies start to pull back in terms of corporate spending – started to stall. 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.”
He also pointed to the impact of the American Airlines crash in Washington at the end of January and a Delta accident in Toronto shortly afterwards.
“So these events somewhat exacerbated the impact on us,” Bastian said.
“So it’s not just corporate and consumer. It was also a question about safety in our industry. And we do know it’s safe to fly. And we do see that starting to dissipate.
“All these factors had a compounding effect that led to the size of the impact which we’re talking about- it’s about a $500 million impact in the quarter.
“I think there’s a lot of uncertainty, but I still think there’s cautious optimism that as the uncertainty starts to clear, then businesses are going to be ready and poised to start to grow.”