In this article, Delta Air Lines’ first-quarter outlook on Friday exceeded analyst expectations as the carrier projected robust travel demand to kick off the year, which CEO Ed Bastian stated could potentially be the carrier’s best ever. Delta anticipates generating over $4 billion in free cash this year, marking an 18% increase from 2024 and falling within its annual target range of $3 billion to $5 billion. For the full year, it foresees annual adjusted earnings surpassing $7.35 per share.
Bastian expressed confidence in the company’s prospects for the new year, noting a consumer trend of prioritizing experiences over material goods. This positions Delta for what Bastian described as “our best financial year in our history.”
In the three months ending Dec. 31, Delta’s performance compared favorably with Wall Street expectations based on consensus estimates from LSEG. The airline projects a revenue increase of 7% to 9%, outpacing the approximately 5% growth predicted by analysts. Delta expects first-quarter earnings per share to range between 70 cents and $1, slightly exceeding Wall Street forecasts of 65 cents to 97 cents.
As the first major U.S. carrier to report earnings this quarter, Delta benefits from strong post-pandemic travel demand, a trend expected to persist throughout the year. The company has capitalized on increased premium travel, with rising demand for roomier seats and rewards credit cards.
Delta’s shares surged by 9% in Friday trading, reflecting a broader rally in airline stocks. The company’s American Express partnership generated $2 billion in the fourth quarter, a 14% increase from the previous year. Revenue from premium seats rose by 8% to $5.2 billion, while main cabin ticket revenue saw a 2% increase to approximately $6 billion.
Unit revenue, a key metric for airlines, rose by 4% in the fourth quarter compared to 2023. Despite a 59% decline in profit to $843 million in the last quarter of 2023, Delta’s revenue climbed by 9% to $15.6 billion year-over-year. Adjusted for one-time items, Delta reported earnings per share of $1.85 in the fourth quarter, with adjusted revenue reaching $14.44 billion, surpassing analysts’ estimates.
