The Atlanta-based airline is the first major U.S. carrier to report that mounting economic worries among consumers and businesses are hurting domestic travel.
"We saw companies start to pull back. Corporate spending started to stall," CEO Ed Bastian told CNBC. "Consumers in a discretionary business do not like uncertainty."
U.S. consumer and business confidence has weakened in the wake of President Donald Trump's tariffs and threats of additional levies, and raised concerns about higher prices. The Atlanta Federal Reserve's closely followed GDPNow tracker suggests the economy could shrink in the first three months of the year.
Since travel spending closely tracks broader economic activity, investors and analysts say a downturn would spell trouble for the airline industry. Carriers' revenue from government has already taken a hit due to a crackdown on federal spending.
Delta now expects a profit in the range of 30 cents to 50 cents a share, compared with previous estimates of 70 cents to $1 estimated in January.
Airline stocks, already hit by the broad selloff on Monday, were routed in after-hours action. Delta shares lost 14%, while United (UAL.O) fell 11%, and American Airlines (AAL.O) dropped nearly 9%.
The S&P 500 passenger airlines index (.SPLRCALI) has fallen 22% in the past month, compared with a 7.5% decline in the S&P 500 index (.SPX). Delta's shares have declined 24% in the last month.
Analysts and investors were Delta's more affluent and diversified customer base meant it was better-positioned to deal with weaker demand. But Bastian said the company was seeing softness in booking from the aerospace and defense, autos, media, entertainment and tech industries.
Investors and analysts are expecting similar revisions from other airlines. Several carriers will make presentations on Tuesday at a JPMorgan industry conference.
Delta said it now expects annual revenue growth of 3% to 4% in the March quarter, lower than an increase of 7% to 9% expected earlier.
A key economic adviser to Trump on Monday pushed back on talk of recession, saying there were many reasons to be bullish about the U.S. economy. But a report from the Federal Reserve Bank of New York on Monday showed American households growing more pessimistic about their prospects.
