“Better than expected” is a description that can very rarely be applied to mostly mediocre wine on a long-haul flight. On Thursday, however, Delta Air Lines investors applied it to the airline’s latest quarterly earnings rather than its wine.
Delta, the first U.S. airline to report its performance for the three months through September, beat earnings estimates and predicted that demand for luxury travel and rising airfares will help it maintain higher altitudes through late 2025 and early 2026.
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In the third quarter, Delta reported $16.7 billion in revenue (up 6% year over year), $1.7 billion in operating income (up 21%) and an operating margin of 10.1% (up 1.2 percentage points). All better than Wall Street expected. Meanwhile, the Atlanta-based airline expects to post record fourth-quarter profits, with adjusted earnings of $1.60 to $1.90 per share.
Elevating Delta’s growth as a Rolls-Royce powerhouse in the third quarter was a 9% year-over-year increase in premium bookings and an 8% increase in corporate bookings. On the company’s earnings call, Delta CEO Ed Bastian said demand for premium travel has shown no signs of slowing, boding well for the broader airline industry amid broader consumer pessimism. In fact, Delta earned $5.8 billion in premium sales in the quarter, almost as much as economy travel revenue, which fell 4% to $6 billion. Glen Hauenstein, the airline’s president, said premium travel revenue is expected to surpass main cabin revenue in 2026. Overall, it was a broadly positive report for the U.S. airline industry after a year of unexpected turbulence:
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In April, major airlines were hit by Wall Street rating downgrades as a result of the Trump administration’s early tariff policies. A slowdown in travel demand left a glut of seats available on flights, but after airlines selected routes, airfares soared and helped achieve some stability.
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Delta shares rose 4.3% on Thursday and rival United Airlines rose 3.3%, although American Airlines fell 1.6% in altitude. United and American are scheduled to report earnings later this month.
No shutdown deceleration (yet): The airport’s air traffic controllers and Transportation Security Administration officials are working without pay amid the government shutdown, and Bastian told CNBC there has been “no impact” on Delta’s operation yet. “If this is not resolved, let’s say in 10 days or so, we will probably start to see some impacts,” he warned.
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