Delta Air Lines Flight Museum in Atlanta, Georgia.
Leslie Josephs/CNBC
Delta Air Lines are forecasting a better-than-expected end to 2025 and a strong start to next year thanks to rising airfares and robust demand for luxury travel.
The airline on Thursday forecast adjusted fourth-quarter earnings of between $1.60 and $1.90 per share, compared with the $1.65 per share that analysts polled by LSEG had expected. Delta said revenue will grow as much as 4% in the final three months of the year, above the 1.7% expected by Wall Street.
“As we look to 2026, Delta is well positioned to deliver revenue growth, margin expansion and profit improvement consistent with our long-term financial framework,” CEO Ed Bastian said in an earnings release.
Delta’s outlook points to improving demand and a reduced surplus of flights, which has pushed domestic prices and airline revenues lower this year, particularly into early 2025 when consumer confidence was shaken in the early stages of President Donald Trump’s tariffs.
“Starting in July, cash sales increased,” Bastian said in an interview.
The Atlanta-based airline is the first of the major airlines to report results this quarter. Its shares rose about 5% in morning trading.
Here’s how the company performed in the third quarter compared to Wall Street expectations, based on LSEG consensus estimates:
- Earnings per share: $1.71 adjusted vs. $1.53 expected
- Revenue: $15.2 billion adjusted versus $15.06 billion expected
Premium outperforms trainers
Delta’s third-quarter profit rose 11% to $1.42 billion, or $2.17 per share, compared with $1.27 billion, or $1.97 per share, a year earlier. Adjusted for one-time items, including capital expenditure-related adjustments, profit rose 15% to $1.12 billion, or $1.71 per share, beating analysts’ estimates.
Adjusted revenue increased 4% year-over-year.
Demand for premium travel continued to outpace demand for coach. Sales in the high-end segment, which includes first class and roomier economy seats, rose 9% to nearly $5.8 billion in the third quarter, while main cabin sales fell 4% to about $6 billion.
Bastian said there is no sign of a decline in consumers’ appetite for premium products. Delta President Glen Hauenstein reiterated that revenue from the airline’s upscale options like first class is on track to eclipse main cabin sales next year.
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Delta and other airlines have eliminated unprofitable or less profitable flights, such as on unpopular weekday travel days, to stem an oversupply of seats in the market. That excess capacity, along with changing consumer habits and higher costs, have made earlier summer profits harder to achieve for some U.S. airlines.
The airline’s domestic unit revenue rose 2% in the third quarter on a 4% increase in capacity, and Delta forecast it would remain positive year-over-year in the current quarter. Stronger demand for business travel helped total domestic passenger revenue rise 5% in the third quarter.
Delta said it expected full-year adjusted earnings per share of $6, at the high end of the $5.25 to $6.25 forecast for 2025 in July.
When asked about the federal government shutdown, Bastian told CNBC that the airline has seen “no impact at all” on its operations in recent days, but that that could change if operations continue for about 10 more days.
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