Delta says election-season flying fears will cost it almost $150 million

Delta Air Lines planes - Photo: Kent Nishimura (Getty Images)
Delta Air Lines planes - Photo: Kent Nishimura (Getty Images)

Delta Air Lines (DAL) reported third-quarter earnings Thursday. Revenue ($15.7 billion) and profits ($1.4 billion of operating income) were in line with expectations, but the company pointed to a speed bump ahead.

“For the December quarter, we expect the improved trends to continue and bookings for the holiday period are strong,” it said in a statement accompanying the numbers. However: “We anticipate a 1 point impact to total unit revenue from reduced travel demand around the election.”

Given that the company is forecasting next quarter’s revenue to be as much as $14.7 billion, that’s nearly $150 million worth of fear. In an interview with CNBC ahead of the company’s earnings call, CEO Ed Bastian said the dip reflects a bit of ballot-based caution creeping into the wider economy.

“We do anticipate seeing a little choppiness around the election, which we’ve seen in past national elections,” he said. “Consumers will, I think, take a little bit of pause in making investment decisions, whether it’s discretionary or other things. I think you’re going to hear other industries talking about that as well.”

Asked how the carrier was able to attribute the demand softness to the election and not some other November happening or consumer malaise, Delta president Glen Hauenstein told analysts and reporters on the company’s earnings call that the momentary slowdown wasn’t showing up anywhere else in its bookings.

“If you were looking at our internal numbers, it’s really obvious to see the trend lines to see where you have markets that are performing incredibly well with positive momentum in October, and then again as soon as the week of the election is complete,” he said. “If you took a trend line, you’d see these two weeks being way off trend.”

He also said that it wasn’t just confirmed to the domestic market, with similar revenue shortfalls showing up in Latin America and other markets.

“It’s pretty much across the board,” he said.

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