Delta Air Lines reported record third-quarter revenue, with CEO Ed Bastian attributing the “tremendous demand” for business performance to a shift of 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 forecast
Income: $12.84 billion vs. $12.83 billion expected
The company’s outlook also points to a healthy holiday season.
“Demand in the fourth quarter looks strong,” Bastian added. “The booking traction that we are seeing is consistent with the momentum that we have built over the last three to four months.”
Enthusiasm for leisure travel and a resurgence in corporate travel has helped drive revenue, offsetting fuel expenses that are up 45% compared to 2019 and other costs that the airline operator is allocating capital to achieve. pre-pandemic capacity.
The company is currently the least refurbished airline in the industry compared to 2019 operating metrics, and is investing more in renewing its fleet domestically and internationally. During the third quarter, Delta signed a purchase agreement with Boeing to add 100 737-10 aircraft to its fleet, with delivery to begin in 2025.
Delta Air Lines expects to operate at 92% of comparable 2019 capacity during 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 airfare prices.
“I’m sure we can get there next summer,” Bastian said. “As we get that additional capacity back, that will probably help ease some of the price pressure for consumers, but more importantly for Delta, it will help us get much better cost productivity, and we’ll be able to spend some of those cost savings to our customers.”
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