Delta Air Lines shares fell by 8% after the company revised its earnings forecast for 2024. The new forecast predicts earnings per share to be between $6 and $7, which is lower than the previous estimate of over $7. This news had a ripple effect on other major airlines, such as United, American, and Southwest, which also saw declines in their stock prices.
Delta, which reported a doubling of its quarterly profit in 2023, reaching $2.04 billion in net income, had initially been on a positive trajectory. CEO Ed Bastian stated in an interview that the airline had recovered almost 90% of its travel demand from pre-pandemic levels. He also expressed optimism about the future, particularly in terms of international travel, as Americans start to plan trips abroad.
However, despite Delta’s successful 2023, with a 20% surge in shares, the stock is still below its all-time high of $63.16 in July 2019. The reduced earnings forecast for 2024 contributed to the decline in stock prices, as shareholders expressed concerns about the company’s future profitability.
The aviation industry has been hit hard by the COVID-19 pandemic, with travel restrictions leading to a significant reduction in demand for air travel. While airlines have gradually started to recover as restrictions ease, uncertainties still loom large. Factors such as new variants of the virus and changing travel regulations continue to have an impact on the industry’s outlook.
Investors will be closely monitoring Delta’s performance in the coming months to gauge the potential for a rebound. The company’s ability to adapt to changing market conditions, capitalize on the recovery of travel demand, and control costs will be crucial in determining its future success.
As Delta and other airlines navigate these challenging times, industry observers and shareholders will be watching closely to see how they respond to changing conditions and whether they can return to their pre-pandemic levels of profitability.