Delta Air Lines earnings: Record revenue on ‘tremendous demand,’ CEO says
Delta Air Lines reported record revenue in the third quarter, and CEO Ed Bastian attributed the "tremendous demand" to business performance to a shift of consumer dollars from goods to services.
“Consumers are prioritizing investing in themselves, experiences and services, rather than buying things,” Bastian told Yahoo Finance.
Comparing the Q3 report to consensus estimates compiled by Bloomberg:
Adjusted net income: $966 billion (including a $35 million impact from Hurricane Ian) vs $994 million expected
Adjusted earnings per share: $1.51 (including a 3 cent impact from Hurricane Ian) vs $1.54 expected
Revenue: $12.84 billion vs $12.83 billion expected
The outlook for the company also points towards a healthy holiday season.
“Demand in the fourth quarter looks strong,” Bastian added. “The booking traction we’re seeing is consistent with the momentum we’ve built over the past three or four months.”
Leisure travel enthusiasm and the reemergence of corporate travel has helped buoy revenue, offsetting fuel expenses being up 45% compared to 2019 and other costs the airline operator is allocating capital toward achieving pre-pandemic capacity.
The company is currently the least restored airline in the industry compared to 2019 operational metrics, and is spending further into refreshing its fleet domestically and internationally. During the third quarter, Delta entered a purchase agreement with Boeing to add one hundred 737-10 aircraft to its fleet, with delivery set to begin in 2025.
Delta Air Lines expects to run at 92% of the comparable 2019 capacity during the December quarter. Beyond that marker, the corporate leadership has its sights set on fully restoring its network over the next six-to-nine months, which would be good news for airfare prices.
“I’m confident we can get there by next summer,” Bastian said “As we bring that additional capacity back, that’s going to help probably take a little bit of the pressure off of the pricing for consumers, but more importantly for Delta, it’s going to help us get much better cost productivity, and we’ll be able to pass some of that cost savings on to our customers.”
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