Delta Air Lines reported strong earnings in the first quarter, with adjusted earnings of $380 million, up 75% from a year earlier. Despite a 2% slip in average revenue per mile, the airline posted record revenue of $12.6 billion for the period. Delta predicts record revenue in the second quarter but expects thinner profit margins, with earnings per share projected between $2.20 to $2.50, down from $2.64 a year ago. However, they remain on target to reach full-year earnings per share of $6 to $7.
Delta has not been as affected as some rivals by Boeing-related disruptions, as it does not currently have any 737 Max jets in its fleet. Only half of its mainline jets come from Boeing, compared to other airlines like United with 80% of its fleet and Southwest with 100%. The US airline industry as a whole is expected to face challenges in the upcoming quarter, with all major carriers forecasted to report losses due to flat to lower fares and rising costs.
Delta CEO Ed Bastian noted strong demand for travel in the future, with the airline experiencing record booking days during the quarter. However, concerns about airline safety have heightened in light of recent incidents with Boeing aircraft. Despite these concerns, Bastian emphasized that safety is a top priority for Delta and the airline industry as a whole, highlighting the overall safety of air travel compared to other modes of transportation.
Delta has not taken delivery of a Boeing jet since 2019 but placed an order for 100 Boeing 737 Max 10 jets in 2022. The FAA has not yet certified the plane for passenger use, and criticism of Boeing’s safety prompted the company to withdraw its certification request. United Airlines expressed doubts about the Max 10 planes it had ordered, leading Delta CEO Bastian to also express uncertainty about when they might receive their jets.
Shares of Delta rose 4% in premarket trading following the release of its strong earnings report. The airline remains optimistic about its future prospects despite challenges facing the industry. Additional reporting and context have been added to this story to provide a comprehensive overview of Delta Air Lines’ current financial and operational status.
