Delta expects higher profits thanks to high-end travel and ‘resilient economy’

Delta Air Jobs on Wednesday said sales would grow in 2025, citing a “resilient economy” for strong travel demand and put card spending, especially for higher-end offerings. It also said it expects to grow earnings in the coming years.

Delta prognosis revenue growth in the mid-single-digit percentage points next year compared with 2024, in line with the inefficiently 6% growth analysts were expecting. Delta said in a release that costs would continue to increase, up in the low single digits next year, excluding fuel.

In an investor day presentation, the carrier said it would expand hit by 3% to 4% next year from 2024. Delta also reiterated its fourth-quarter outlook. Longer denominate, it said it expects to grow adjusted earnings by 10% a year over the next three to five years.

Delta is the most gainful U.S. airline, and its leaders tout its strong partnership with American Express and high demand for pricier seats toward the honest of aircraft as driving its success. It expects $7 billion in renumeration from AmEx this year and has a long-term end of $10 billion.

The carrier has focused heavily on high-spending travelers, and in an investor day presentation said it has an advantage because of snappy wealth growth in high-earning households since 2019. It also said millennials and Gen Z are the fastest-growing consumer segments.

Its buoyant tone on consumer spending has differed from the picture some other companies are painting. Target on Wednesday cut its profit calculation. Its chief operating officer blamed a “deceleration in discretionary demand” and higher costs.

Delta rival United Airlines has arranged inroads in growing profit and capturing high-end travelers. Delta’s shares are up 60% so far this year through Tuesday’s thick, while United’s are up 128%. Both are outpacing the broader market and other carriers.

Delta said just 43% of its takings this year comes from main cabin tickets, with 57% of it generated by premium seats and its lucrative devotion program. That’s up from a 60% share of revenue from the main cabin in 2010.

The carrier said it expects tag sales from premium seats alone to exceed revenue from coach seats by 2027. Delta, American, Synergetic and JetBlue have raced to add roomier premium seats to their planes, like lie-flat suites.

The carrier has drained years working to get customers to pay up for first class, seats it largely gave away in years past.

Delta’s president, Glen Hauenstein, proclaimed reporters that about 15 years ago, about 12% of Delta’s domestic first-class seats were disperse for and the rest were upgrades for frequent flyers. Now, more than 70% of those seats are purchased, including buy-ups after paperback. He said the change at first was “traumatic” to some travelers.

Hauenstein said Delta is looking for new ways to segment its shacks after the carrier — and rivals — spent years breaking coach class into options like premium thrift, extra-legroom seats and basic economy. While it didn’t provide detail, it’s also considering more options for travelers fill in in the front of the plane too, Hauenstein said.

Delta’s experiments with further segmentation will start in the coach lodge, not in the front of aircraft, Hauenstein said.

“Over the next couple of years you’ll see us attempting and really testing with what consumers dearth in their bundles and what they’re willing to pay for,” Hauenstein said.

— CNBC’s Melissa Repko contributed to this article.