…focuses on optimization and efficiency
Delta Air Lines has reported impressive financial results for the March quarter of 2024, showcasing the airline’s ability to navigate the industry’s evolving landscape.
“For the March quarter, we delivered record revenue on outstanding operational performance, enabling strong earnings growth,” said Ed Bastian, Delta’s chief executive officer. “We anticipate continued strong momentum for our business, and in the June quarter, we expect to deliver record revenue, a mid-teens operating margin, and earnings of US$2.20 to US$2.50 per share.”
One of the standout achievements for Delta in the March quarter was its industry-leading operational performance. The airline operated the most reliable network among its competitors, ranking first in completion factor and on-time arrivals. This resulted in a record March quarter completion factor for Delta.
“Thanks to the extraordinary work of our 100,000 people, Delta is delivering the best operational reliability in our history, and we have widened the gap to our competitors,” Bastian added.
The strong operational performance provided Delta with an incremental point of capacity growth and unit cost favorability, with non-fuel unit costs 1.5 percent higher than the previous year.
Optimizing for the future
Delta’s leadership acknowledged that the company is in a period of optimization, with a focus on restoring its most profitable core hubs and delivering efficiency gains. “Growth is normalizing and we are in a period of optimization, with a focus on restoring our most profitable core hubs and delivering efficiency gains,” said Dan Janki, Delta’s chief financial officer.
This focus on optimization is expected to continue into the June quarter, with non-fuel unit costs anticipated to increase approximately 2 percent, consistent with the airline’s full-year outlook for a low single-digit increase in non-fuel unit costs over 2023.
Balance sheet strength and liquidity
Delta’s financial performance during the March quarter was also marked by a strong balance sheet and ample liquidity. The airline delivered US$1.4 billion of free cash flow in the quarter, after paying over US$1 billion in profit-sharing to its employees and reinvesting US$1.1 billion in the business.
“Delta delivered US$1.4 billion of free cash flow in the March quarter after paying over US$1 billion in profit sharing to our employees and reinvesting US$1.1 billion in the business,” Janki said. “We repaid nearly US$1 billion of debt and ended the quarter with 2.9x of leverage.”
The company’s commitment to strengthening its balance sheet was recognized during the quarter, with positive outlook updates from Moody’s and Fitch, marking Delta’s continued progress towards an investment-grade rating.
Delta’s outlook for the June quarter and the full year 2024 remains optimistic. The airline expects to deliver record revenue and a mid-teens operating margin in the June quarter, with earnings per share in the range of US$2.20 to US$2.50.
For the full year 2024, Delta is reiterating its outlook for earnings per share of US$6 to US$7 and free cash flow of US$3 to US$4 billion, further solidifying the company’s position as a leader in the industry.
