Retail Investors Uncertain About Airline Stocks As Delta Cuts Back On Growth Plans

Retail investors appeared to be divided on the prospects of airline stocks after Delta Air Lines Inc. (DAL) said it would reduce planning capacity growth in the second quarter amid slower growth due to the tariff wars.

According to an ongoing poll, 41% of the respondents among the 2,600 participants so far believe in shorting the stocks as the economy is headed for a recession. On the other hand, 38% opined that the bad news has already been priced in, and airline stocks are worth buying in the current environment.

More than a fifth of the participants believe they are unsure about the trade given that there’s too much uncertainty.

Delta Airlines reported a 3.3% rise in its adjusted revenue of $12.98 billion compared to an estimate of $13.46 billion, according to FinChat data. Adjusted earnings per share (EPS) stood at $0.46 versus a Street estimate of $0.39.

During the quarter, total revenue per available seat mile (TRASM) fell 2% year over year to $0.2053.
 
CEO Ed Bastian acknowledged that growth has largely stalled amid broad economic uncertainty around global trade.

“In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures.”

The airline now expects June-quarter profitability of $1.5 to $2 billion.

Meanwhile, the naysayers appeared to have gained the upper hand on Thursday as major U.S. airline stocks plunged and pared their gains registered on Wednesday when Trump announced a 90-day pause on his tariffs.

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