Delta Air Lines Says Baby Boomers Flock To Europe Despite Stock Prices
Crowds visit the Colosseum in Rome in March 2024. (Photo by Emanuele Cremaschi)
Shares in Delta Air Lines have declined steeply in 2025, reflecting the trend for the entire airline industry, but one thing has not changed for the carrier: baby boomers still want to fly to Europe.
Delta President Glen Hauenstein has proclaimed, for more than a year, that baby boomers – the generation born between 1946 and 1964 – desire European travel experiences. At first, they flocked to Europe as part of the 'revenge travel' phenomenon, compensating for the inability to travel in the pandemic years.
Now they travel because 'There's only so much time to go to Europe,' Hauenstein said on the carrier's first quarter earnings call on Wednesday.
The call occurred as investors fretted about the impact of tariffs on the economy, about three hours before President Trump pulled back most of his immediate tariff threat. Hauenstein was making the point that while Delta's domestic business has been impacted by recession fears, its international business -- particularly in the transatlantic -- has remained strong.
Ticket sales made Tuesday and recorded Wednesday 'are very strong for international through the summer all the way out to September, October,' Hauenstein said. 'So we are actually up significantly in transatlantic, for example, in cash sales year-over-year.
'It's people's intent to travel in the future,' he said, adding 'The cohort that is traveling right now has an average age in Delta One in the 60s, which means the baby boomers are traveling. And being a baby boomer, I can say this without fear of retribution, there is only so much time to go to Europe or almost so much time to go see Australia or Japan and so you've got this wealth effect where this cohort of retirees is wealthier than any other cohort even with the most recent rundown and they want to go do things.'
Delta CEO Ed Bastian added that almost every Delta customer 'has household earnings on an annual basis of $100,000 or more which, by the way, represents 40% of U.S. households. So it's not an elitist definition by any means. That group of people is accumulated just since 2019, $35 trillion of overall wealth between their home real estate, market, etc.' In that context, Bastian said, a market pullback between $5 trillion to $7 trillion range will not deter travel.
On Wednesday, Delta shares gained 23% to close at $44.27. The shares were up around 7% until the Trump administration announced a 90-day pause in reciprocal tariffs. On Thursday shares were down about 7% in morning trading. Year-to-date, at Wednesday's close, shares were down about 25%.
Regarding international travel, Delta became the first carrier to publicly say that President Trump's tough talk regarding tariffs and some U.S. allies has not deterred long-haul travel that originates abroad. (Canada and Mexico origination traffic has been severely impacted.)
Hauenstein followed United CEO Scott Kirby in saying that 80% of long-haul international travel originates in the U.S. As for travel that originates outside the U.S., Hauenstein said on the call that ' We have not seen yet a crack in rest of world to the United States. We're mindful that could happen, but we haven't seen it yet.
'One of the reasons we've biased towards U.S. point of origin is because the fares that we have been getting historically out of the U.S. are significantly higher than they are out of the rest of world,' he said. 'So over time, we've continued to push the percentage of sales that come onshore to where we sit about 80% of our long-haul international now is onshore U.S.'
Later, Hauenstein said that if Europe-origination travel does decline, 'We're able to resell that, maybe not at the yield that we want, but there is enough demand to the U.S. from the entire world that we can mitigate most of that softness should it occur. To this date, it hasn't occurred.' He said such sales could target some passengers outside Delta's hubs in Amsterdam, London and Paris.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
35 minutes ago
- Yahoo
World Bank: Trump's Trade War Could Destroy the Global Economy
Trump's trade war won't just cripple domestic markets—it will slow global gross domestic product growth to its lowest point in 17 years. The World Bank's Global Economic Prospects report found that 'international discord' surrounding trade has 'upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II.' The report did not name President Trump explicitly, but made it clear that his unprecedented tariffs—a 10 percent tax on imports from the entire world—were the direct cause of the drop in global and domestic economic growth. 'The rise in trade barriers, heightened uncertainty, and the spike in financial market volatility are set to weigh on private consumption, international trade, and investment,' the report stated. 'As a result, U.S. growth is expected to decelerate sharply in 2025, to 1.4 percent.' Additionally, global output is expected to slip by 0.5 percent. The report's future outlook is also not encouraging. 'In 2026-27, a tepid recovery is expected, leaving global output materially below January projections, the report said. 'The outlook largely hinges on the evolution of trade policy globally. Growth could turn out to be lower if trade restrictions escalate or if policy uncertainty persists, which could also result in a build-up of financial stress.… On the upside, uncertainty and trade barriers could diminish if major economies reach lasting agreements that address trade tensions.' It's clear that these hits to GDP will impede the growth of the domestic and the international working class, as Trump struggles to make a single trade deal while kneecapping America's diplomatic legitimacy in the process. 'The world economy today is once more running into turbulence,' World Bank chief economist Indermit Gill wrote. 'Without a swift course correction, the harm to living standards could be deep.' President Trump has yet to comment on the World Bank's report.
Washington Post
42 minutes ago
- Washington Post
Judge tosses lawsuit over Trump's firing of US African Development Foundation board members
A federal judge has tossed out a lawsuit over President Donald Trump's dismantling of a U.S. federal agency that invests in African small businesses . U.S. District Judge Richard Leon in Washington, D.C., dismissed the case on Tuesday, finding that Trump was acting within his legal authority when he fired the U.S. African Development Foundation's board members in February. In March, the same judge ruled that the administration's removal of most grant money and staff from the congressionally created agency was also legal, as long as the agency was maintained at the minimum level required by law.
Yahoo
an hour ago
- Yahoo
Has Corporate Travel Management Limited's (ASX:CTD) Impressive Stock Performance Got Anything to Do With Its Fundamentals?
Most readers would already be aware that Corporate Travel Management's (ASX:CTD) stock increased significantly by 19% over the past month. We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes. Particularly, we will be paying attention to Corporate Travel Management's ROE today. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Put another way, it reveals the company's success at turning shareholder investments into profits. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Corporate Travel Management is: 5.3% = AU$65m ÷ AU$1.2b (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. So, this means that for every A$1 of its shareholder's investments, the company generates a profit of A$0.05. Check out our latest analysis for Corporate Travel Management Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. When you first look at it, Corporate Travel Management's ROE doesn't look that attractive. A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 8.0% either. However, we we're pleasantly surprised to see that Corporate Travel Management grew its net income at a significant rate of 41% in the last five years. So, there might be other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place. We then performed a comparison between Corporate Travel Management's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 41% in the same 5-year period. Earnings growth is an important metric to consider when valuing a stock. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for CTD? You can find out in our latest intrinsic value infographic research report. Corporate Travel Management's significant three-year median payout ratio of 52% (where it is retaining only 48% of its income) suggests that the company has been able to achieve a high growth in earnings despite returning most of its income to shareholders. Besides, Corporate Travel Management has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 43%. However, Corporate Travel Management's ROE is predicted to rise to 10% despite there being no anticipated change in its payout ratio. On the whole, we do feel that Corporate Travel Management has some positive attributes. Namely, its high earnings growth. We do however feel that the earnings growth number could have been even higher, had the company been reinvesting more of its earnings and paid out less dividends. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
