Delta Air Lines Announces Strong Third Quarter Earnings

Delta Air Lines has released its third quarter business update with an earnings report higher than pre-pandemic levels and updates on its latest partnerships and sustainability goals.

Earnings Exceed Pre-Pandemic Levels

Its adjusted operating revenue was $12.8 billion in its third quarter, 3 percent higher than its same quarter in 2019; it's unclear whether inflation or higher levels of air travel are to account for this rise, though part of it comes from an increase in cargo revenue (a 27 percent increase from third quarter 2019), premium air travel bookings (up 8 percent) as well as business and international travel (reaching 80 percent and 97 percent of their pre-pandemic levels, both nearly recovered).

After paying off debts and operation costs, its adjusted operating income is $1.5 billion. Delta's adjusted net debt is $20.5 billion at the end of the quarter.

Its adjusted non-fuel operation costs was $7.8 billion, while fuel during this quarter cost $3.3 billion, an increase of 45 percent from the same quarter in 2019, though fuel efficiency saw a 3 percent improvement from 2019.

"We reached a major milestone this quarter, with adjusted revenue 3 percent higher and unit revenues up 23 percent compared to 2019, marking the highest revenue and unit revenue quarter in Delta's history. Our results reflect the strength of our brand and diverse revenue streams, with another quarter of record co-brand remuneration and continued premium product outperformance," said Glen Hauenstein, Delta's president. "With corporate travel improving and robust domestic and international demand, we expect December quarter revenue to be up 5 to 9 percent compared to December quarter 2019."

Future Updates and Partnerships

Delta expects its quarterly revenue to reach 5 to 9 percent higher than the fourth quarter of 2019, with an adjusted net debt of around $22.5 billion.

Back in July, the airline announced a new partnership with Boeing to purchase 100 Boeing 737-10 aircraft, with an option to purchase 30 more, with deliveries expected in 2025. These planes offer greater premium seating offerings and increased sustainability.

This September, the US DOT approved antitrust immunity to the trans-American Joint Venture Agreement between the airline and LATAM, increasing travel options for Delta customers.

On October 11, Delta partnered with Joby Aviation, Inc., to develop a home-to-airport transportation service for Delta customers with zero carbon emissions using eVTOL technology.

Additionally, Delta and Starbucks have partnered on October 12 to offer loyalty rewards to both Delta SkyMiles and Starbucks Rewards members, with opportunities to link accounts for more rewards offerings.

Sustainability and Workplace Inclusivity Updates

Delta also reported some new developments with sustainability and workplace inclusivity this past quarter.

It was recognized for the second year in a row as a Forbes' Best Workplaces for Women in the U.S. and it scored 100 percent on the Disability Equality Index for the seventh year in a row, earning it the title of one of the country's "Best Places to Work for Disability Inclusion."

It also published its second annual Close the Gap report, which saw an increase in representation of women and underrepresented racial and ethnic groups in roles across the company. Delta also engaged over 50 percent of its officers in Racial Equity Leadership Workshops.

Sustainability improvements have also continued this quarter. Its goal of reducing scope 1 and 3 greenhouse gas emissions caused by jet fuel by 45 percent by 2035 was accepted by the Science Based Targets initiative.

The airline also announced a collaboration with MIT to test and develop tools to eliminate persistent contrails, which comprise 10 percent of all contrails and create one of aviation's largest environmental impacts.

It also partnered with DG Fuels to obtain 55 million gallons of SAF each year for seven years beginning in 2027.

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