Delta Air Lines Inc. shares dropped on Thursday after the carrier warned that demand in its main cabin economy class remains weak.
Despite reaffirming its earnings outlook and highlighting growth in premium products, investors reacted negatively to comments from Delta President Glen Hauenstein, who said the airline continues to face sluggish bookings from lower-paying passengers.
Premium revenue surpasses economy
Hauenstein noted at the Morgan Stanley Annual Laguna Conference that more than 50% of Delta’s revenue now comes from outside its main cabin economy-class product.
This diversification has provided support even as lower-income travelers cut back on spending.
“Now that we’re less reliant on main cabin, we don’t need the main cabin to be positive to post positive returns,” Hauenstein said.
While corporate travel remains strong—particularly in industries like finance—the main cabin continues to underperform.
International trends have also been uneven: trans-Atlantic demand was weak over the summer, though Delta expects a rebound in the fall as more travelers seek to avoid peak-season crowds.
By contrast, demand in Latin America and Pacific routes has been more resilient and is expected to stay that way.
Revenue outlook and market reaction
Delta reaffirmed its third-quarter earnings guidance, projecting $1.25 to $1.75 a share, alongside revenue growth of 2% to 4% year over year.
Analysts surveyed by Bloomberg expect growth of 2.3% on average. The updated range marks an improvement from the airline’s previous forecast of flat to 4% growth.
Despite the guidance, Delta shares fell 3.8% to $59.06 on Thursday, making the company the worst performer in the S&P 500.
The decline followed Hauenstein’s acknowledgment that sluggish demand for economy-class seats continues to weigh on performance.
The stock recovered slightly, trading at $60.04 at the time of writing.
In its July earnings release, Delta had already flagged the gap between premium and main cabin sales, noting that premium revenue rose 5% year over year while economy-class revenue lagged.
Hauenstein on Thursday reiterated that the airline’s diverse revenue streams are helping to cushion the shortfall.
Industry context and competitive landscape
Delta’s challenges mirror wider turbulence across the airline industry earlier this year, when weak bookings from January through June forced many carriers to pull their 2025 financial guidance.
Since mid-summer, however, trends have improved.
United Airlines Holdings Inc. reported stronger bookings in July and August, with CEO Scott Kirby noting better-than-expected demand for Labor Day and upcoming holiday travel.
JetBlue Airways Corp. and Allegiant Travel Co. have also cited improved revenue momentum.
Delta temporarily suspended its full-year guidance in April as tariffs and macroeconomic uncertainty clouded the outlook.
By July, the company restored its forecasts, crediting resilience in its premium and diversified revenue streams.
On Thursday, Hauenstein stressed that Delta’s reliance on high-margin categories means the airline can sustain profitability even if economy-class demand remains weak.
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