Delta Air Lines lowers forecasts in the face of economic uncertainty

(MarketScreener with Reuters) - Delta Air Lines has halved its first-quarter profit forecast, citing an uncertain economic environment in the U.S. that is weighing on travel demand.

Delta Air Lines shares fell by 14% after the announcement, also affecting the shares of competitors United Airlines (-11%) and American Airlines (-9%).

Delta CEO Ed Bastian explained that businesses were cutting back on travel spending and consumers were reluctant to book in a climate of uncertainty.

Economic concerns have been exacerbated by tariffs imposed by the Trump administration, stoking fears of higher prices. The Atlanta Federal Reserve's GDPNow indicator even suggests an economic contraction in the first quarter.

Delta now expects earnings of between 30 and 50 cents per share, compared with a previous estimate of 70 cents to 1 dollar. The company also expects annual sales growth of 3% to 4%, compared with an initial forecast of 7% to 9%.

Investors expect other airlines to also adjust their forecasts at JPMorgan 's industry conference on Tuesday.