Delta Air Lines stock is having its worst day in months

Delta Air Lines shares are paring back some losses from panic selling they took on earlier when the company posted earnings that were disappointing to investors. The stock is down 5% in Thursday afternoon trading after dipping more than 9% earlier in the day. The previous mark would have been the carrier’s worst market day in two years, but now it’s just the worst day since January.

The company said it had its best second quarter ever, with $16.7 billion in revenue, but profits fell 29% to $1.3 billion because that bottom line is becoming more expensive to generate. Delta’s financial results represent the beginning of airline earnings season, and given it’s size — Delta has the biggest share of the domestic market — it’s seen as a bellwether for the rest of the industry, which is .

“Oversupply in the domestic market and aggressive discounting look to be weighing on fares,” wrote Thomas Fitzgerald, an analyst at TD Cowen who covers airlines. “While we had flagged this as a risk, we had viewed Delta has more immune to the impacts relative to peers.”

Some of the bigger players like Delta have been cutting ticket prices in order to grab market share from budget airlines. Though its premium first-class and super-frequent-flyer revenue climbed 10%, main-cabin fares were flat. CEO Ed Bastian said flatly that it’s a dog-eat-dog world out there, and if lower-cost airlines can’t cut prices anymore, they’ll have to pull back on supply (and yield their lost ground) in order to create a little price-bumping scarcity.

“You cannot, if you’re on the lower end of the industry’s food chain, continue to post losses particularly given the health of the demand set we’ve all seen over these last couple of years,” CEO Ed Bastian said on the company’s earnings call. “I don’t know what form that will take, but I guarantee — and you’re already starting to see — capacity is usually the first lever you have available.”