Delta Air Lines CEO Confident In Stronger 2025 As Demand Holds Steady

Delta Air Lines, Inc. DAL shares rose in premarket trading Thursday after the Atlanta-based carrier posted stronger-than-expected second-quarter results and reinstated its full-year 2025 guidance.

Operating revenue for the quarter was $16.65 billion, flat from a year ago but above the consensus estimate of $16.18 billion. Adjusted operating revenue rose 1% year over year to $15.51 billion.

Delta credited its June-quarter revenue, a 1% year-over-year increase, to continued strength in high-margin segments. Premium cabin sales rose 5%, loyalty revenue climbed 8%, American Express AXP remuneration increased 10% to $2 billion, while adjusted unit revenue declined 3% amid 4% capacity growth.

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Adjusted earnings per share were $2.10, down 11% from the year-ago period but topping expectations of $2.05. The airline’s adjusted average fuel price fell to $2.26 per gallon, compared with $2.64 last year.

Passenger revenue surged 26% to $13.88 billion, while cargo revenue rose 7% to $212 million. Other revenue declined 2% to $2.57 billion.

Delta reported adjusted operating income of $2.05 billion, down from $2.27 billion a year earlier. Adjusted operating margin narrowed to 13.2% from 14.7%.

Adjusted operating cash flow totaled $1.84 billion, a 25% decline year over year, while free cash flow stood at $733 million.

As of the end of the June quarter, Delta reported adjusted net debt of $16.32 billion, down $1.7 billion from the end of 2024. Total liquidity was $6.4 billion, including $3.1 billion in undrawn revolver capacity.

The passenger load factor declined to 86% from 87% a year ago. Air traffic liability stood at $8.9 billion.

During the quarter, Delta announced new or expanded partnerships with WestJet, LATAM, IndiGo, and Virgin Atlantic, strengthening its global network and international connectivity.

“As we look to the second half of our centennial year, we remain focused on executing our strategic priorities and managing the levers within our control to deliver strong earnings and cash flow.  Reflecting our confidence in the business, we are restoring financial guidance with an expectation for earnings per share of $5.25 to $6.25 and free cash flow of $3 to $4 billion, consistent with our long-term free cash flow targets,” commented Ed Bastian, Delta’s chief executive officer.

Delta President Glen Hauenstein noted, “Through the quarter, demand trends stabilized at levels that are flat to last year and we continued to see resilience in our diverse, high-margin revenue streams.”

In June, DAL announced a 25% increase to its quarterly dividend, raising it to $0.1875 per share. The payout is set for Aug. 21 to shareholders of record as of July 31.

2025 Outlook

Delta reinstated its full-year 2025 guidance, projecting earnings per share of $5.25 to $6.25, compared to the consensus estimate of $5.42. The airline also expects free cash flow of $3 billion to $4 billion.

“For the September quarter, we expect total revenue to be flat to up 4% compared to the prior year, with unit revenue trends expected to improve through the second half of the year as we continue to adjust capacity and the industry further rationalizes supply,” commented Glen Hauenstein, Delta’s president.

Third-Quarter 2025 Outlook

Delta forecasts total revenue to rise 0% to 4% year over year, with an operating margin between 9% and 11%. Adjusted earnings per share are projected to range from $1.25 to $1.75, versus a consensus estimate of $1.34.

Delta expects the September quarter to deliver its strongest non-fuel unit cost performance of the year, with costs projected to remain flat or decline slightly compared to 2024.

Price Action: DAL shares were trading higher by 12.03% to $56.76 premarket at last check Thursday.

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