Three months ago Delta Air Lines was confident 2025 would be its best year ever. Today, the airline changed course.
“Growth has largely stalled,” CEO Ed Bastian said Wednesday as withdrew the company’s earnings forecast and declared his priority is “focusing on what we can control” and “actively managing” costs.
Delta accounts for about 40% of all flights at LaGuardia Airport, according to data from the Port Authority of New York and New Jersey. The airline said in 2022 that it employs more than 10,000 New Yorkers and on Wednesday was one of the first major companies to report earnings since the White House launched a trade war last week.
Companies across virtually all sectors of economy are hunkering down in anticipation of harder times. In the tech sector, semiconductor orders have fallen “materially” since mid-March, Evercore ISI said in a report today. On Tuesday Fitch Ratings lowered its outlook for the U.S. retail and consumer-products sectors to “deteriorating” from “neutral.” The ratings firm noted that inflation is persistent and consumer sentiment is waning.
The race into the bunkers got slowed, perhaps temporarily, after President Trump this afternoon declared a 90-day pause on tariffs to every country except China. The S&P 500 soared by 9%, though it remains 4% lower than early last week and down 7% this year.
On Wednesday morning JPMorgan CEO Jamie Dimon told Fox Business News that a recession was a “likely outcome.” Yesterday the giant bank warned institutional investors to avoid buying commercial real estate debt. JPMorgan has $145 billion of that on its books and will report quarterly earnings Friday morning.
The Wall Street Journal reported today that Prada’s talks to acquire Versace for $1.6 billion from fashion holding company Capri are at risk of collapse. Later, the Financial Times reported that Capri agreed to reduce the sale price by $200 million, due the expected impact of tariffs. In late 2023 Prada paid more than $800 million to acquire two Midtown towers, with one slated to be its U.S. flagship store.
Other companies are looking to bolster their cash coffers.
Late Tuesday, the owner of the 2,000-room Marriott Marquis Hotel in Times Square, Host Hotels & Resorts, filed to raise up to $600 million in cash by selling shares. Host, which owns 81 hotels, has more than $500 million in cash on its books plus a $1.5 billion available line of credit, and in February its CEO said the hotelier was well positioned thanks to its “fortress balance sheet.” In a securities filing the company said it would use proceeds from a stock sale for acquisitions and “general corporate purposes.”
Host Hotel shares had fallen by 27% this year heading into Wednesday and traded for about half their early 2024 level. Given the stock’s depressed price it’s unlikely the company will sell shares now, said BMO Capital Markets analyst Ari Klein. But it never hurts to be prepared for all contingencies.
“It’s good to have this in place in case you need it,” Klein said.
A spokesman for Host Hotels didn’t return a call or email seeking comment.
