Delta Air Lines stated that bookings have stabilized after a pullback in March and April, but remain lower than estimated at the beginning of the year. Despite this, the company provided a full-year profit outlook and predicted stronger earnings for the current quarter, leading to a rally in airline shares.

The U.S. airline industry saw travel demand stabilize, although passenger traffic remains lower than last year, resulting in decreased airfares. Delta’s second-quarter earnings report showed flat passenger revenue compared to last year, with weak pricing power in most markets, especially in the U.S. domestic sector.

Delta’s CEO expressed optimism for future improvements in domestic airfares due to plans to reduce the supply of price-sensitive airline seats, potentially lessening discounting pressure. The company’s shares surged by 13%, with other airlines like United, American, Southwest, and Alaska also seeing gains.

Despite Delta’s positive outlook, consumer surveys and spending data indicate uncertainty for travel spending in the coming months. Fewer consumers plan to spend more on travel compared to last year, and consumer spending on airlines decreased in June. Analysts note limited visibility for airline bookings post-mid-August.

Delta reiterated its stance on not paying tariffs for aircraft deliveries and urged policymakers to follow the UK-U.S. trade deal’s example in fully removing tariffs on aircraft and related parts. The airline forecasted an adjusted profit of $1.25 to $1.75 per share for the quarter ending September and adjusted earnings of $5.25 to $6.25 per share for the full year.

Read more at Yahoo Finance: Delta Air sees profit boost as booking stability sparks stock rally