Delta Air Lines has reported an optimistic first-quarter outlook that surpasses analyst expectations, driven by strong travel demand as predicted by CEO Ed Bastian. The airline anticipates 2025 to be "our best financial year in our history," according to Bastian. Despite a 59% drop in profit to $843 million during the last three months of the previous year, Delta managed to exceed sales and earnings estimates for the period, showcasing its resilience in the face of economic challenges.
Delta's revenue saw an impressive 9% increase, reaching $15.6 billion compared to the same period last year. This growth can be attributed to a successful partnership with American Express, which contributed $2 billion in revenue in the fourth quarter—an increase of 14% from the previous year. The airline's expenses, including payroll, rose by 7%, amounting to an additional $942 million. Nevertheless, unit revenue climbed 4%, indicating effective management of flights and revenue generation.
Furthermore, Delta's projections for revenue growth are promising, with an expected rise of 7% to 9%, exceeding the approximately 5% growth anticipated by analysts polled by LSEG. The airline also forecasts first-quarter earnings between 70 cents and $1 per share, slightly above Wall Street's expectations of 65 cents to 97 cents per share.
Revenue from premium seating options, such as first class and premium economy, increased by 8% in the fourth quarter, totaling $5.2 billion. Meanwhile, main cabin ticket revenue experienced a more modest 2% rise, reaching about $6 billion. Delta expects to generate over $4 billion in free cash this year, marking an 18% increase from 2024. The airline's annual adjusted earnings are expected to reach $7.35 per share.
"Everywhere, we see consumers continue to prioritize experience over goods." – Ed Bastian
Delta's fourth-quarter performance highlights its ability to adapt and thrive. The airline posted per-share earnings of $1.85 on adjusted revenue of $14.44 billion, both figures outpacing analysts' predictions. This robust performance underscores Delta's strategic initiatives and commitment to enhancing passenger experiences.