Delta Air Lines reported strong third quarter results today, showing double-digit growth in all the major categories, including passenger and revenue miles flown. Yet under CEO Ed Bastian’s stewardship, the airline just announced an incredible 15% rise in profits, to $1.12 billion. This works out to $1.71 per share, higher than analysts’ expectations. This excellent performance is due to a few major drivers. Most remarkably, we’ve been witnessing strong domestic unit revenue growth and strong resilience within the luxury travel sector.
Delta’s domestic unit revenue exploded by 2% in the third quarter. In the meantime, the overall domestic passenger revenue had a strong 5% growth. The airline’s capacity growth was limited to 4%, even as the airline expertly managed its expansion to match customer desire to travel. Bastian continued, saying Delta is the only company that didn’t shut down during the recent federal government shutdown. He touted the carrier’s resilience through today’s trying environment, calling it an “upbeat success story.”
Beginning in July, cash sales returned, ” Bastian said, emphasizing a quick turn in consumer sentiment that has helped save the airline’s bottom line. High-end segment revenue jumped 9% to almost $5.8 billion, reflecting the continued resiliency of travelers willing to pay up for more luxurious travel experiences. Meanwhile, Delta’s revenue from its most profitable cabin, the main cabin, was down 4%—around $6 billion.
Delta is predicting more good news in domestic unit revenue growth for the current quarter. The airline is projecting adjusted earnings of between $1.60 and $1.90 per share in the fourth quarter. It expects year-over-year revenue increases of no more than 4% in the last quarter of the year as well.
Delta’s adjusted revenue was up 4% year-over-year to $15.2 billion, beating expectations of $15.06 billion. Bastian expressed confidence in the airline’s future, stating, “Looking to 2026, Delta is well positioned to deliver top-line growth, margin expansion and earnings improvement consistent with our long-term financial framework.”
To maintain profitability amidst market fluctuations, Delta and other carriers have adjusted their flight offerings by eliminating less profitable routes. This strategy is intended to help address the oversupply of seats in the market while maximizing overall operational efficiency.