Delta Air Lines provided an optimistic first-quarter outlook on Friday, exceeding analyst expectations as the carrier predicted strong travel demand to kick off the year. CEO Ed Bastian stated that 2025 is shaping up to be the airline’s best financial year to date.
Delta projects more than $4 billion in free cash flow for 2025, an 18% increase from 2024 and aligning with its annual target range of $3 billion to $5 billion. For the full year, the airline forecasts adjusted earnings exceeding $7.35 per share.
Strong Start to the Year
“We feel quite good coming into the new year,” Bastian said during an interview. “Everywhere, we see consumers continue to prioritize experience over goods.” He added that this trend positions Delta for “our best financial year in our history.”
Fourth-Quarter Performance
Here’s how Delta performed in the three months ending Dec. 31, compared to Wall Street expectations based on consensus estimates from LSEG:
- Earnings per share: $1.85 adjusted vs. $1.75 expected
- Revenue: $14.44 billion adjusted vs. $14.18 billion expected
Delta anticipates revenue growth of 7% to 9% for the first quarter, surpassing the roughly 5% growth analysts had projected. The airline also expects earnings per share for the quarter to range between $0.70 and $1, slightly above Wall Street’s forecast of $0.65 to $0.97.
Post-Pandemic Travel Boom
As the first major U.S. airline to report earnings this quarter, Delta is benefiting from sustained post-pandemic travel demand, which analysts believe will remain robust in 2025. The airline has also capitalized on a surge in premium travel, with increasing numbers of customers opting for enhanced seating or rewards credit cards.
In the fourth quarter, Delta’s revenue from premium seats, including first class and premium economy, grew by 8% to $5.2 billion. This compares to a 2% rise in main cabin ticket revenue, which totaled approximately $6 billion.
Additionally, Delta’s partnership with American Express contributed $2 billion in the fourth quarter, a 14% year-over-year increase.
Market Performance
Delta’s stock surged 9% on Friday. Over the past 12 months, Delta’s shares have climbed nearly 59%, while shares of its chief competitor, United Airlines, have gained more than 140% during the same period.
Financial Metrics
Unit revenue, a key measure of how much revenue an airline generates relative to its flight operations, rose by 4% in the fourth quarter compared to 2023.
However, profit fell by 59% to $843 million for the final quarter due to a 7% rise in expenses, including payroll, which increased by $942 million. Total revenue for the quarter grew by 9% to $15.6 billion year-over-year.
After adjusting for one-time items, Delta reported per-share earnings of $1.85 and adjusted revenue of $14.44 billion, both exceeding analyst estimates.
Delta’s growth reflects a strong recovery in the airline industry, supported by strategic investments and rising consumer demand for premium experiences.
As the carrier looks ahead, analysts and stakeholders remain focused on its ability to sustain momentum in 2025 and beyond.