It was learned from the WiseNews APP that Delta Air Lines (DAL.US) expects that due to the fierce competition in the domestic market in the United States, the company's profits this quarter will be lower than Wall Street's expectations. Before the pre-market trading on Thursday, Delta Air Lines' stock price fell by 9.8%. Competitors United Airlines (UAL.US) and American Airlines (AAL.US) also fell by nearly 5% before the market opened. Delta Air Lines' disappointing guidance has also put pressure on overseas competitors. The stock price of International Airlines Group, the parent company of British Airways, fell as much as 3.5%. Air France-KLM and Deutsche Lufthansa also fell.

Delta Air Lines stated in a statement on Thursday that its adjusted EPS for the third quarter will be between $1.70 and $2, and revenue will increase by 2% to 4%. In contrast, the market expects EPS to be $2.04 and revenue to grow by 5.3%.

This prediction highlights the wide-ranging impact of airlines competing to fill the additional seats added during the summer peak season. Competitors across the industry are forced to maintain competitiveness with lower airfares.

A price war is sweeping through.

Delta Air Lines CEO Ed Bastian said, "Oversupply leads to heavy discounts. Every company is affected. "

Bastian said that from June to August, the price of air tickets has been reduced "particularly severely." He estimated that the capacity of the airline industry exceeds demand by 3% to 4%. Airlines have taken measures to deal with this problem and will reduce capacity starting in September.

Delta Air Lines is the first US airline to provide quarterly performance guidance. Delta Air Lines stated that since its core hub airports and international routes have fully recovered, the company plans to slow down its growth rate. The capacity expansion this quarter will not exceed 6%.

The airline is struggling with high costs, including a $0.5 billion annual increase in labor costs after most employees were given a raise on June 1, and an additional $0.35 billion in maintenance costs. From 2023, non-fuel costs per mile flown (a measure of efficiency) will increase by 2%.

Delta Air Lines maintains an annual earnings forecast of $6 to $7 per share and a forecast of up to $4 billion in free cash flow.

Uneven recovery.

The US airline industry has had an uneven year, with ticket discounts, high and lasting costs, and supply chain difficulties offsetting the benefits of record summer passenger and business travel rebounds. Delta Air Lines has largely avoided many of the challenges that plagued competitors, including aggressive investors, delays in aircraft delivery, and labor disputes.

Bastian said that Delta Air Lines' profitable business travel business grew by about 13% in the second quarter, and revenue from international passengers also increased compared to 2023. Sales of high-end products increased by 10% year-on-year, while main cabin ticket revenue remained almost unchanged.

However, adjusted EPS for the second quarter was $2.36, slightly lower than analysts' average expectations of $2.38. Revenue was $15.41 billion.

Delta Air Lines has resumed its normal schedule for retiring old aircraft. Earlier, due to delays in the delivery of new aircraft and supply chain bottlenecks that caused delayed deliveries of new engines and replacement parts, Delta Air Lines extended the operating time for some aircraft. The company expects to receive 40 to 50 new aircraft from Airbus this year, with delivery times "a few months" away from the planned time.