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Trump’s tariffs could affect airline take rates as costs go up.
Shares of several travel and cruise majors came under pressure on Monday as Delta Air Lines warned of softening domestic demand and cut its guidance for the first quarter, dragging down retail sentiment.
"The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in domestic demand," the company said in a filing after the market closed on Monday.
The airline projected 3% to 4% revenue growth for its March quarter, compared to its earlier forecast of a 7% to 9% Investor’s Business Daily reported.
Delta's filing is the first major signal of disruption in the airline industry caused by Donald Trump's policies. The U.S. president has imposed tariffs on Canada, Mexico, and China, setting the U.S. up for reciprocal tariffs.
These tariffs could affect airline take rates as costs go up. Trump is also cutting federal budgets and staff, which would limit official travel.
Sentiment on Booking Holdings fell to ‘extremely bearish’ from ‘bullish’ a week ago. Message volume increased to ‘high’ from ‘normal.’
One bearish watcher had a dire prediction, given the recessionary fears that spooked the broader market on Monday.
Sentiment on cruise operator Royal Caribbean fell to ‘bearish’ from ‘neutral’ a week ago. While message volume rose to ‘high’ from ‘normal.’
One commenter on Royal Caribbean noted the recession would impact in “unprecedented ways.”
Meanwhile, sentiment around Carnival was upbeat, albeit down from last week’s ‘extremely bullish,’ with one watcher who has been holding the stock for five years saying he would buy more. Message volume remained in the ‘high’ zone.
Stocks of Booking Holdings, Royal Caribbean, and Carnival were down 4.7%, 3.1% and 7.5% on Monday, respectively.
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