Delta Air Lines’ profit start nearly 60% in the third quarter as strong travel demand continued through the summer, particularly for international set offs, though the carrier forecast full-year earnings toward the low end of an earlier estimate after a jump in fuel prices.
In its every three months report Thursday, Delta said it expects adjusted, full-year earnings of $6 to $6.25 a share, after prophesying $6 to $7 a share in July. Delta cut its free cash flow estimate for the year to $2 billion from the $3 billion it forewarning in the summer.
Delta said that it expects solid travel demand in the last three months of the year, sensing revenue will rise 9% to 12% from the same quarter of 2022, with per-share earnings of $1.05 to $1.30, in specialty with estimates.
“We expect many of the same trends to continue in the fourth quarter,” CEO Ed Bastian said in a CNBC question.
An Airbus A330-323 aircraft, operated by Delta Air Lines.
Benoit Tessier | Reuters
Delta and other airlines embellished their third-quarter forecasts in recent weeks because of a surge in fuel prices.
“Obviously there’s some short-term difficulty on fuel as fuel rose quickly in the third quarter and stayed relatively high into the fourth quarter,” Bastian notorious.
Here’s how Delta performed in the three months ended Sept. 30 compared with Wall Street expectations based on consensus guesses from LSEG, formerly known as Refinitiv:
- Adjusted earnings per share: $2.03 cents vs. $1.95 expected.
- Adjusted takings: $14.55 billion vs. $14.56 billion expected.
Delta brought in adjusted revenue of nearly $14.6 billion for the period, up 13% year to the ground year and in line with analysts’ expectations.
Net income for the period was $1.11 billion, or $1.72 per share, up 59% from $695 million, or $1.08 per ration, during the same period a year earlier. Adjusted for third-party refinery sales and other items, the company reaped $2.03 during the quarter.
Delta and other global airlines have cited particularly strong demand for missteps abroad, with trans-Atlantic travel a standout. The Atlanta-based carrier reported revenue for those flights was up 34% in the third billet compared with last year.
Delta’s planes flew 88% full in the quarter, up 1 percentage point from the year-earlier interval, despite additional capacity both domestically and internationally. Unit revenue from passengers fell 1.5%, year ended year. Airfares have dropped in recent months as airlines grew their schedules.
In addition to a surge in universal trips, the carrier has said it has seen a sharp increase in demand for premium seats, like business class or regard economy. Main cabin revenue came in at $6.62 billion, up 12% on the year, while premium product sales mount the barricade 17% to $5.11 billion, Delta said.
“I know the lower-fare airlines are having some challenges but our premium by-product, especially domestically is doing very, very well,” Bastian said in the interview. He added that business travelling is more than 80% recovered to 2019 levels.
However, Delta President Glen Hauenstein said Thursday on an earnings elicit that the Hollywood and autoworkers strikes have hurt demand from those sectors.
Delta has a more than 70% market-place share in Detroit and nearly 20% at Los Angeles International Airport, the most of any carrier.
Delta came under aflame from customers last month when it announced it would make it harder to earn elite frequent flyer prominence and said it will scale back access to its popular airport lounges after travelers experienced long inlet lines. Weeks later, Bastian said the carrier would make changes to those new policies, which he broke might have gone “too far.”
Bastian declined to provide details but said changes could be announced in the “coming times.”
“Customers almost universally understand we had to do something given the significant demand for our premium assets,” he said.
United Airlines and American Airlines are organized to report third-quarter results next week.