Between the U.S. government shutdown and ongoing economic uncertainty, it’s a turbulent time for airlines. But not for Delta, the largest American airline by market capitalization, which has emerged from the industry’s recent challenges largely unscathed as its investment in high-end travel begins to pay off.
Delta shares jumped more than 4 percent today (Oct. 9) after the Atlanta-headquartered airline reported better-than-expected revenue and profit for the July-September quarter. Quarterly sales reached $15.2 billion, up 4.1 percent year-over-year, while net income rose 11 percent to $1.42 billion. Strong demand for premium travel helped lift results: sales in Delta’s premium unit climbed 9 percent to $5.8 billion, even as main cabin revenue dipped 4 percent to $6 billion.
The airline could soon earn more from premium seating than from economy for the first time. Delta had previously forecast that milestone for 2027, but it may now happen as early as next year, according to the airline’s president, Glen Hauenstein. “We see that there are many, many more opportunities in premium in the coming years,” he told analysts today.
Some of those opportunities lie in Delta’s key markets like Los Angeles, Boston, New York and Seattle due to their concentration of a “considerable amount of premium” customers, CEO Ed Bastian said on today’s call.
The airline is also expanding its high-end offerings by outfitting nearly 1,000 aircraft with free WiFi and deepening partnerships with American Express, Uber and YouTube. Delta has even ventured into retail through collaborations like its recent lounge set project with Spanx.
Rebounding from the ‘spring swoon’
Back in March, things looked less promising when Delta slashed its profit forecast amid economic concerns tied to the Trump administration’s tariffs. The company refers to that period as the “spring swoon.” Since then, Delta has rebounded and offered stronger-than-expected guidance for the fourth quarter of 2025, projecting total revenue growth between 2 and 4 percent over the next three months.
Meanwhile, the U.S. travel industry faces headwinds from the federal government shutdown that began in early October. Flights across the country have been delayed as Federal Aviation Administration (FAA) facilities report staffing shortages. The country has also seen a “slight tick-up in sick calls” from air traffic controllers—who, like other essential workers, are expected to work without pay during the shutdown, said Transportation Secretary Sean Duffy at a recent press conference.
Delta has weathered shutdowns before. During the 35-day federal shutdown that began in 2018, the airline lost about $1 million per day in revenue, Hauenstein said. This time, the impact has been smaller, in part because Delta is less dependent on the Ronald Reagan Washington National Airport—one of the hubs most affected by staffing disruptions.
“While we are monitoring potential impacts from the U.S. government shutdown, we have not seen a material effect to date,” added Hauenstein.
Alexandra Tremayne-Pengelly
Source link
