Delta released its quarterly earnings today, slashing its earning outlook and saying there’s a “softness” in domestic demand for travel. Here’s the full quote from Delta’s securities filing:
“The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in Domestic demand.”
At publishing, Delta stock is down just over 11% after hours.
Personally, I’m not surprised that airlines are experiencing less demand for travel, particularly for discretionary travel. Consumer confidence is down, the stock market is almost in correction territory, prices are rising (I just paid $15.99 for 18 eggs!), and unemployment is rising.
It will also be interesting to see if Delta and other airlines reduce their requirements to obtain loyalty status based on this “softening” demand. Personally, I think airlines very quickly forget that loyalty is a two-way street when things are going great and then scramble to retain customers when there’s a bump in the road (and/or ask for government handouts).
Travel is an industry that I love and I hope this “softening” in demand is short-term, but I would not be upset at all if it lasts long enough to have airlines rethink their recent devaluations (spoiler alert: I doubt they will).
