Delta Air Lines’ profit increased over 60% in the third quarter as robust travel demand persisted into the summer, particularly for international flights ,however the airline anticipated full-year earnings at the low end of an earlier projection due to an increase in fuel prices.
Delta said in its quarterly report on Thursday that it expected adjusted full-year earnings of $6 to $6.25 per share, up from $6 to $7 per share in July. Delta reduced its free cash flow expectation for the year to $2 billion from $3 billion in the summer.
Delta anticipates strong travel demand in the last three months of the year, with revenue expected to climb 9% to 12% from the same period in 2022, with per-share earnings of $1.05 to $1.30, in line with expectations.
Delta and other airlines have recently reduced their third-quarter predictions due to an increase in fuel prices.
“Obviously there’s some short-term pressure on fuel as fuel rose quickly in the third quarter and stayed relatively high into the fourth quarter,” he said.
Here’s how Delta fared in the three months ending Sept. 30 in comparison to Wall Street predictions based on LSEG, formerly known as Refinitiv:
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Earnings per share adjusted: $2.03 cents, compared to $1.95 projected.
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Adjusted sales were $14.55 billion, compared to the $14.56 billion projected.
Delta earned about $14.6 billion in adjusted revenue for the quarter, up 13% year over year and in line with analysts’ estimates.
Net income was $1.11 billion, or $1.72 per share, up 59% from $695 million, or $1.08 per share, in the same quarter last year. The firm earned $2.03 per share during the quarter after adjusting for third-party refinery sales and other things.
Delta and other global airlines have reported particularly robust demand for international travel, with transatlantic travel standing out. The Atlanta-based carrier claimed that revenue from those flights increased 34% year on year in the third quarter.
Despite increased capacity both locally and abroad, Delta’s flights flew 88% full in the third quarter, up 1 percentage point from the previous year. Passenger unit revenue declined 1.5% year on year. Airfares have fallen in recent months as airlines have expanded their itineraries.
In addition to a rise in foreign flights, the carrier has reported a significant increase in demand for premium tickets, such as business class or premium economy. Delta said that main cabin revenue was $6.62 billion, up 12% year on year, while premium product sales increased 17% to $5.11 billion.
Delta has the highest market share of any carrier in Detroit, with more than 70%, and approximately 20% at Los Angeles International Airport.
