Delta Projects Record Year-End Boosted by Premium Demand and Capacity Expansion Slowdown
Delta Air Lines anticipates a strong finish to 2025, driven by robust demand for high-end travel and a significant slowdown in industry seat expansion. These factors are strengthening its margins and revenue outlook.
Record Profits and Corporate Booking Rebound
The airline forecasts historic profits for the current quarter, after reporting better-than-expected earnings in the third quarter thanks to improved demand and increased pricing power.
Its shares rose approximately 5% at midday following the announcement.
Over the past six weeks, Delta has experienced sustained sales growth across all regions and a recovery in corporate bookings, with increases seen in all sectors.
Fewer Seats, Higher Prices
Reduced seat capacity in the U.S. domestic market has driven up ticket prices, boosting unit revenue—a key indicator of profitability per seat—during the September quarter, following a previous decline.
With Spirit Airlines scaling back operations after its bankruptcy and other airlines moderating their expansion plans to avoid discount pressure, Delta expects to maintain positive unit revenue growth for the fourth quarter.
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“A structural shift has gained momentum across the industry,” stated Delta CEO Ed Bastian, pointing to the reduction of unprofitable flights among U.S. airlines.
Optimistic Projections for Year-End
The company forecasts adjusted earnings of between $1.60 and $1.90 per share for the quarter ending in December. The midpoint, $1.75, exceeds the average analyst estimate of $1.66 per share, according to LSEG data.
Quarterly revenue is expected to increase between 2% and 4% compared to the same period last year. In the quarter ended in September, Delta reported adjusted earnings of $1.71 per share, above the projected $1.53.
The optimistic tone contrasts with the first half of the year when economic uncertainty led Delta and other carriers to withdraw their financial forecasts.
Premium Travel Boom
Since the pandemic, demand for luxury travel has surged. Passengers are willing to pay more for comfort and better services, and Delta—along with United—has been one of the main beneficiaries of this trend.
Revenue from its premium segment grew 9% in the third quarter compared to the previous year and accounted for approximately 43% of total passenger revenue.
Motivated by these results, the airline plans to significantly expand its premium seat offering and reduce capacity in the main cabin.
“Our exposure to higher-income households has strengthened our position compared to competitors focused on more economically pressured segments,” emphasized Delta President Glen Hauenstein.
Uncertainty from Potential US Government Shutdown
Delta’s forecasts do not include potential impacts from a U.S. government shutdown, which has already caused over 13,000 flight delays this week due to staffing shortages in air traffic control centers.
If the situation persists, it could affect consumer spending and overall economic activity.
During the 35-day shutdown in 2019, Delta suffered a financial impact of $25 million.
Hauenstein assured, however, that the company has not observed a material effect from the current situation so far.
With information from Reuters.
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