By Katherine Hamilton

Airline shares fell after Delta Air Lines cut its first-quarter outlook due to falling consumer confidence.

Alongside Delta's 14% drop to $43.50 after the market closed Monday, United Airlines slid 12% to $68.54, American Airlines Group fell 9% to $11.39, and Southwest Airlines was down 5% to $26.68.

Delta slashed its outlook for revenue growth and earnings per share in the first quarter, about two months after the company initially provided guidance, a reflection of the quick downturn in domestic demand.

U.S. travelers are spending less as both corporate and consumer confidence has plunged due to macroeconomic uncertainty, the company said. Delta is scheduled to participate in a J.P. Morgan Chase conference Tuesday morning.

Melius Research analyst Conor Cunningham said in a note last week demand in January was solid, but February saw more pressure after consumer confidence started to fall. March is the most important month of the first quarter, he said, but headlines about tariffs, weaker jobs and a weakening U.S. dollar are likely to tamp down travel spending.

Investors expect American Airlines to cut its first-quarter guidance due to its plane crash over the Potomac River in January, Cunningham said. That, along with job cuts by the Department of Government Efficiency, has put a particularly large dent in demand in the greater Washington, D.C., area, Cunningham said.

Airlines with an outsized domestic footprint compared with rivals may be hurt more by low domestic demand, J.P. Morgan analyst Jamie Baker said in a note this month. Carriers like Delta, American and United have more premium and international exposure, giving them a chance to outperform Southwest in the near term, Baker said.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

March 10, 2025 17:39 ET (21:39 GMT)

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