Delta Air Lines posted record revenue in the third quarter, and CEO Ed Bastian attributed the “tremendous demand” for business performance to a shift in consumer dollars from goods to services.
“Consumers prioritize investing in themselves, experiences and services, rather than buying things,” Bastian told Yahoo Finance.
Comparing the third-quarter report to consensus estimates compiled by Bloomberg:
-
Adjusted net income: $966 billion (including a $35 million impact from Hurricane Ian) vs. $994 million expected
-
Adjusted earnings per share: $1.51 (including a 3-cent impact from Hurricane Ian) vs $1.54 expected
-
Income: $12.84 billion vs. $12.83 billion expected
The company’s outlook also points toward a healthy holiday season.
“Demand in the fourth quarter looks strong,” added Bastian. “The booking traction we’re seeing is consistent with the momentum we’ve built over the last three to four months.”
Enthusiasm for leisure travel and a resurgence in corporate travel have helped boost revenue, offsetting fuel expenses that rose 45% compared to 2019 and other costs that the airline is allocating capital to meet capacity before the pandemic.
The company is currently the least refurbished airline in the industry compared to 2019 operational metrics and is spending more to upgrade its fleet domestically and internationally. During the third quarter, Delta signed a purchase agreement with Boeing to add one hundred 737-10 aircraft to its fleet, with delivery beginning in 2025.
Delta Air Lines expects to operate at 92% of comparable 2019 capacity in the December quarter. Beyond that marker, corporate leadership has its sights set on fully restoring its network over the next six to nine months, which would be good news for airline ticket prices.
“I’m sure we can get there next summer,” Bastian said. “As we get that additional capacity back, that will probably help reduce some of the pricing pressure for consumers, but more importantly for Delta, it will help us get much better cost productivity and we’ll be able to pass on some of this cost savings to our customers.”
Click here to see the latest stock trends on the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including the events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for apple or android
Follow Yahoo Finance at Twitter, Facebook, Instagram, Flipboard, LinkedIni YouTube
