Delta Air Lines Announces March Quarter 2025 Financial Results

Core Insights - Delta Air Lines reported solid profitability for the March quarter, with revenue of $13 billion, a 3.3% increase year-over-year, and an operating margin of 4.0% [6][21] - The company is guiding for the June quarter operating margin to be between 11% and 14%, with earnings per share (EPS) projected between $1.70 and $2.30 [5][6] - Delta is reducing planned capacity growth in the second half of the year to align supply with demand, expecting profitability of $1.5 to $2 billion for the June quarter [3][5] Financial Performance - Total operating revenue for the March quarter was $14.0 billion, up 2% from the previous year, with operating income of $569 million [21][32] - Adjusted operating income was $591 million, with a margin of 4.6%, while pre-tax income increased to $382 million [21][32] - The airline's net income for the quarter was $240 million, resulting in diluted earnings per share of $0.37, compared to $0.06 in the prior year [21][32] Revenue Breakdown - Passenger revenue increased to $11.48 billion, a 3% rise year-over-year, with premium products growing by 7% [33][34] - Corporate travel sales showed low-single-digit growth, with strength in the banking and technology sectors [12][34] - International revenue grew mid-single digits, with Pacific revenue up 16% and transatlantic revenue up 5% [12][34] Cost Management - Operating expenses totaled $13.5 billion, with non-fuel costs at $9.9 billion, reflecting a 2.6% increase in non-fuel unit costs year-over-year [13][21] - Adjusted fuel expense decreased by 7% to $2.4 billion, with the average fuel price per gallon down 11% to $2.45 [13][21] - The company expects non-fuel unit cost growth to remain in the low-single digits for the second quarter and the rest of the year [9][10] Balance Sheet and Liquidity - Delta ended the quarter with total debt and finance lease obligations of $15.8 billion, down 18% from the previous year [10][14] - The company achieved its highest credit rating in decades, reflecting a focus on debt reduction and a gross leverage target of 1x [10][14] - Liquidity at the end of the quarter was $6.8 billion, including $3.1 billion in undrawn revolving credit facilities [14][38] Operational Highlights - Delta operated the most on-time airline year-to-date, leading its competitive set in on-time departures and arrivals [11][19] - The airline took delivery of nine new aircraft during the quarter and announced new international routes [19][19] - Delta celebrated its employees with $1.4 billion in profit sharing, recognizing their performance in 2024 [19][19]