Delta Air Lines today reported financial results for the September quarter and provided its outlook for the December quarter.
Delta Air Lines today reported financial results for the September quarter and provided its outlook for the December quarter. Highlights of the September quarter, including GAAP and adjusted metrics, are in the full release and incorporated here.
Revenue Environment and Outlook
"Through the September quarter, unit revenue growth improved sequentially in all geographic entities, reflecting an improved equilibrium between demand and supply as industry growth moderated," said Glen Hauenstein, Delta's president.
"For the December quarter, we expect the improved trends to continue and bookings for the holiday period are strong. We anticipate a 1 point impact to total unit revenue from reduced travel demand around the election. With this, total revenue growth is expected to be up 2 percent to 4 percent compared to prior year on capacity growth of 3 percent to 4 percent. Industry supply growth continues to rationalize, positioning Delta well in the final quarter of the year and as we move into 2025."
- Unit revenue growth improved sequentially through the September quarter: Delta delivered September quarter revenue of $14.6 billion, including the $380 million impact from the CrowdStrike-caused outage. Adjusted total unit revenue (TRASM) was down 3.6 percent versus 2023, including a 1.1 point impact from the outage. In the month of September, Domestic and Transatlantic unit revenue growth inflected positive.
- Diversified revenue streams driving Delta's differentiation: Delta's diversified revenue base, led primarily by premium and loyalty, made up 57 percent of total revenue in the September quarter. Premium revenue growth continued to outpace main cabin in Domestic and International. Total loyalty revenue grew 6 percent year-over-year driven by award redemptions and growth in co-brand card spend. American Express remuneration was $1.8 billion, 6 percent higher than the September quarter of 2023. Cargo revenue grew 27 percent over prior year on international volume strength.
- International trends positive, led by Transatlantic: International demand remains strong with trends improving through the quarter in Transatlantic and Latin. Transatlantic unit revenues inflected positive in the month of September as Paris demand rebounded following the Olympics. Latin America revenue benefited from the continued maturation of Delta's joint venture with LATAM in South America. Network restoration continues in the Pacific, with double-digit revenue growth driven by travel to South Korea and Japan.
- Corporate sales growth continues: Managed corporate travel sales* were up 7 percent over the September quarter of 2023, with double-digit growth in the tech, media and banking sectors. Recent corporate survey results indicate that 85 percent of companies expect their travel spend to increase in 2025.
*Corporate travel sales represent the revenue from tickets sold to corporate contracted customers, including tickets for travel during and beyond the referenced time period |
Cost Performance and Outlook
"For the December quarter, we expect to return to year-over-year earnings growth and margin expansion with an outlook for December quarter earnings of $1.60 to $1.85 per share on an 11 percent to 13 percent operating margin," said Dan Janki, Delta's chief financial officer. "Our teams are consistently running a great operation, enabling us to drive efficiency and deliver non-fuel unit cost growth of low-single-digits for the year, consistent with our outlook at the start of the year."
September Quarter 2024 Cost Performance
- Operating expense of $14.3 billion and adjusted operating expense of $13.2 billion
- Adjusted non-fuel costs of $10.1 billion
- Non-fuel CASM was 13.30¢, an increase of 5.7 percent year-over-year
- Adjusted fuel expense of $2.8 billion was down 6 percent year-over-year
- Adjusted fuel price of $2.53 per gallon decreased 9 percent year-over-year with a refinery loss of 3¢ per gallon
- Fuel efficiency, defined as gallons per 1,000 ASMs, was 14.4, a 0.8 percent improvement year-over-year
Balance Sheet, Cash and Liquidity
"Strong cash generation has supported debt repayment of $2.4 billion year-to-date, bringing gross leverage to less than 3 times," Janki said. "During the quarter, we achieved a meaningful milestone with our balance sheet receiving an upgrade to investment grade from Fitch. Delta is now investment-grade rated at Moody's and Fitch, and one notch away at S&P with a positive outlook."
- Adjusted net debt of $18.7 billion at September quarter end, a reduction of $2.9 billion from the end of 2023
- Payments on debt and finance lease obligations for the September quarter of $263 million
- Weighted average interest rate of 4.3 percent with 94 percent fixed rate debt and 6 percent variable rate debt
- Adjusted operating cash flow in the September quarter of $1.3 billion, and with gross capital expenditures of $1.3 billion, free cash flow was $95 million
- Air Traffic Liability ended the quarter at $8.3 billion
September Quarter 2024 Highlights
Operations, Network and Fleet
- Operated the most on-time airline year-to-date, leading competitive set in on-time departures and arrivals and network peers in completion factor1
- Took delivery of 27 aircraft year-to-date and nine in the September quarter, including the A321neo, A330-900 and A350-900
- Building on record performance in 2024, Delta announced its Transatlantic summer schedule for 2025, offering over 700 weekly flights to 33 destinations, including seven new routes
- Signed codeshare agreements with Scandinavian Airlines System (SAS), expanding connection opportunities between North America and Scandinavia, and with Saudia Airlines, building on the existing relationship and expanding destination options between North America and the Arabian Peninsula
- Announced first-ever nonstop service from SLC - ICN beginning next summer, growing Delta's global network and providing connections to key destinations across Asia
- Introduced five new routes from Austin, Texas, beginning in March 2025, providing customers with more options than ever before
- Announced five new routes including two new destinations to Mexico this winter, building on Delta's partnership with Aeromexico and increasing connectivity to popular Mexican destinations
Culture and People
- Accrued $320 million in profit sharing during the quarter, resulting in $964 million accrued year-to-date
- Earned Great Place To Work® Certification™ for the sixth consecutive year based on the Trust Index survey of Delta Employees
- Recognized on the 2024 PEOPLE Companies That Care List, the only airline to make the list
- Named No. 1 in the Forbes 2024 list of America's Best Employers for New Grads
- Achieved the No. 2 spot on the Indeed Workplace Wellbeing 100, an index of public companies that excel in employee wellbeing and outperform the market
- Ranked No. 6 on the Forbes list of America's Best Employers for Tech Workers
- Contributed $500,000 to the American Red Cross to support Hurricane Helene relief efforts
- 900+ Delta people volunteered across the U.S. on 9/11 with the 9/11 Day organization to assemble meals for Americans facing food insecurity
Customer Experience and Loyalty
- Expanded the introduction of fast, free Wi-Fi for SkyMiles members with over 90 percent of domestic mainline network now equipped
- Completed the new Delta One Lounge in LAX (opened to customers October 10), spanning over 10,000 square feet, the second Delta One Lounge debuted in 2024, with a lounge now available at both ends of JFK - LAX flights
- Expanded Delta Sync seatback product to over 330 aircraft in the first year since its debut
- Rolled out Delta Premium Select on select transcontinental flights in September with continued rollout throughout the remainder of the year
- Debuted Delta Business Traveler, a complimentary program that provides individual business travelers with exclusive offers from Delta and partners
- Named official airline of the WNBA, transporting all 12 of the league's teams throughout the regular season and playoffs
- Expanded Global Corporate Priority benefits program to include LATAM Airlines, further enhancing the travel experience for business customers
Environmental, Social and Governance
- Partnered with Flint Hills Resources to develop a 30-million gallon per year Sustainable Aviation Fuel (SAF) blending facility in Minneapolis (MSP), Delta's second largest hub
- Elevated partnership with Greater MSP and Minnesota SAF Hub by sponsoring the first ever SAF delivered to MSP airport, which was used for the inaugural SAF flight from MSP - LGA as part of Climate Week
- Delta's Carbon Council led cross-enterprise initiatives, saving over 16 million gallons of fuel year-to-date via weight reductions, speed optimization and lowering Auxiliary Power Unit (APU) utilization
- Held the inaugural Sustainable Skies Challenge, a project in partnership with Junior Achievement (JA) Europe aimed to formulate innovative sustainable aviation solutions among young European students
- Hosted annual Women Inspiring the Next Generation (WING) flight, bringing 130 girls to NASA's Kennedy Space Center on a flight operated entirely by women, exposing girls to career opportunities in aviation
1FlightStats preliminary data for Delta flights mainline system, Delta's competitive set (AA, UA, B6, AS, WN, and DL) and Delta's network peers (AA, UA, and DL) from Jan 1 - Sep 30, 2024. On-time is defined as A0 |
September quarter results have been adjusted primarily for the third-party refinery sales and unrealized gains/losses on investments as described in the reconciliations in Note A.
GAAP | $ | % | ||
($ in millions except per share and unit costs) | 3Q24 | 3Q23 | ||
Operating income | 1,397 | 1,984 | (587) | (30) % |
Operating margin | 8.9 % | 12.8 % | (3.9) pts | (30) % |
Pre-tax income | 1,561 | 1,521 | 40 | 3 % |
Pre-tax margin | 10.0 % | 9.8 % | 0.2 pts | 2 % |
Net income | 1,272 | 1,108 | 164 | 15 % |
Diluted earnings per share | 1.97 | 1.72 | 0.25 | 15 % |
Operating revenue | 15,677 | 15,488 | 189 | 1 % |
Total revenue per available seat mile (TRASM) (cents) | 20.58 | 21.15 | (0.57) | (3) % |
Operating expense | 14,280 | 13,504 | 776 | 6 % |
Cost per available seat mile (CASM) (cents) | 18.75 | 18.44 | 0.31 | 2 % |
Fuel expense | 2,747 | 2,936 | (189) | (6) % |
Average fuel price per gallon | 2.51 | 2.76 | (0.25) | (9) % |
Operating cash flow | 1,274 | 1,076 | 198 | 18 % |
Capital expenditures | 1,328 | 1,269 | 59 | 5 % |
Total debt and finance lease obligations | 17,697 | 19,513 | (1,816) | (9) % |
Adjusted | $ | % | ||
($ in millions except per share and unit costs) | 3Q24 | 3Q23 | ||
Operating income | 1,373 | 1,963 | (590) | (30) % |
Operating margin | 9.4 % | 13.5 % | (4.1) pts | (30) % |
Pre-tax income | 1,254 | 1,719 | (465) | (27) % |
Pre-tax margin | 8.6 % | 11.8 % | (3.2) pts | (27) % |
Net income | 971 | 1,308 | (337) | (26) % |
Diluted earnings per share | 1.50 | 2.03 | (0.53) | (26) % |
Operating revenue | 14,594 | 14,553 | 41 | — % |
TRASM (cents) | 19.16 | 19.87 | (0.71) | (3.6) % |
Operating expense | 13,221 | 12,590 | 631 | 5 % |
Non-fuel cost | 10,130 | 9,216 | 914 | 10 % |
Non-fuel unit cost (CASM-Ex) (cents) | 13.30 | 12.59 | 0.71 | 5.7 % |
Fuel expense | 2,771 | 2,957 | (186) | (6) % |
Average fuel price per gallon | 2.53 | 2.78 | (0.25) | (9) % |
Operating cash flow | 1,276 | 1,127 | 149 | 13 % |
Free cash flow | 95 | (250) | 345 | NM |
Gross capital expenditures | 1,270 | 1,442 | (172) | (12) % |
Adjusted net debt | 18,682 | 20,384 | (1,702) | (8) % |
DELTA AIR LINES, INC. | |||||||||
Consolidated Statements of Operations | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
(in millions, except per share data) | 2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change | |
Operating Revenue: | |||||||||
Passenger | $ 13,107 | $ 13,119 | $ (12) | — % | $ 38,079 | $ 36,735 | $ 1,344 | 4 % | |
Cargo | 196 | 154 | 42 | 27 % | 574 | 535 | 39 | 7 % | |
Other | 2,374 | 2,215 | 159 | 7 % | 7,431 | 6,555 | 876 | 13 % | |
Total operating revenue | 15,677 | 15,488 | 189 | 1 % | 46,084 | 43,825 | 2,259 | 5 % | |
Operating Expense: | |||||||||
Salaries and related costs | 4,231 | 3,760 | 471 | 13 % | 12,035 | 10,838 | 1,197 | 11 % | |
Aircraft fuel and related taxes | 2,747 | 2,936 | (189) | (6) % | 8,157 | 8,128 | 29 | — % | |
Ancillary businesses and refinery | 1,250 | 1,128 | 122 | 11 % | 4,083 | 3,427 | 656 | 19 % | |
Contracted services | 1,069 | 1,004 | 65 | 6 % | 3,134 | 3,009 | 125 | 4 % | |
Landing fees and other rents | 832 | 679 | 153 | 23 % | 2,347 | 1,880 | 467 | 25 % | |
Aircraft maintenance materials and outside repairs | 627 | 661 | (34) | (5) % | 1,990 | 1,860 | 130 | 7 % | |
Depreciation and amortization | 643 | 594 | 49 | 8 % | 1,878 | 1,731 | 147 | 8 % | |
Passenger commissions and other selling expenses | 643 | 618 | 25 | 4 % | 1,865 | 1,770 | 95 | 5 % | |
Regional carrier expense | 600 | 546 | 54 | 10 % | 1,731 | 1,664 | 67 | 4 % | |
Passenger service | 463 | 449 | 14 | 3 % | 1,339 | 1,307 | 32 | 2 % | |
Profit sharing | 320 | 417 | (97) | (23) % | 964 | 1,084 | (120) | (11) % | |
Aircraft rent | 137 | 131 | 6 | 5 % | 411 | 395 | 16 | 4 % | |
Pilot agreement and related expenses | — | — | — | — % | — | 864 | (864) | NM | |
Other | 718 | 581 | 137 | 24 % | 1,872 | 1,669 | 203 | 12 % | |
Total operating expense | 14,280 | 13,504 | 776 | 6 % | 41,806 | 39,626 | 2,180 | 6 % | |
Operating Income | 1,397 | 1,984 | (587) | (30) % | 4,278 | 4,199 | 79 | 2 % | |
Non-Operating Income/(Expense): | |||||||||
Interest expense, net | (173) | (196) | 23 | (12) % | (567) | (627) | 60 | (10) % | |
Gain/(loss) on investments, net | 350 | (206) | 556 | NM | (73) | 45 | (118) | NM | |
Loss on extinguishment of debt | — | (13) | 13 | NM | (36) | (63) | 27 | (43) % | |
Miscellaneous, net | (13) | (48) | 35 | (73) % | (146) | (221) | 75 | (34) % | |
Total non-operating income/(expense), net | 164 | (463) | 627 | NM | (822) | (866) | 44 | (5) % | |
Income Before Income Taxes | 1,561 | 1,521 | 40 | 3 % | 3,456 | 3,333 | 123 | 4 % | |
Income Tax Provision | (289) | (413) | 124 | (30) % | (842) | (761) | (81) | 11 % | |
Net Income | $ 1,272 | $ 1,108 | $ 164 | 15 % | $ 2,614 | $ 2,572 | $ 42 | 2 % | |
Basic Earnings Per Share | $ 1.98 | $ 1.73 | $ 4.08 | $ 4.03 | |||||
Diluted Earnings Per Share | $ 1.97 | $ 1.72 | $ 4.04 | $ 4.00 | |||||
Basic Weighted Average Shares Outstanding | 641 | 639 | 640 | 639 | |||||
Diluted Weighted Average Shares Outstanding | 647 | 644 | 647 | 643 | |||||
DELTA AIR LINES, INC. | |||||||||
Passenger Revenue | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
(in millions) | 2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change | |
Ticket - Main cabin | $ 6,309 | $ 6,620 | $ (311) | (5) % | $ 18,450 | $ 18,538 | $ (88) | — % | |
Ticket - Premium products | 5,336 | 5,113 | 223 | 4 % | 15,377 | 14,263 | 1,114 | 8 % | |
Loyalty travel awards | 978 | 902 | 76 | 8 % | 2,798 | 2,547 | 251 | 10 % | |
Travel-related services | 484 | 484 | — | — % | 1,454 | 1,387 | 67 | 5 % | |
Passenger revenue | $ 13,107 | $ 13,119 | $ (12) | — % | $ 38,079 | $ 36,735 | $ 1,344 | 4 % | |
DELTA AIR LINES, INC. | |||||||||
Other Revenue | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
(in millions) | 2024 | 2023 | $ Change | % Change | 2024 | 2023 | $ Change | % Change | |
Refinery | $ 1,083 | $ 935 | $ 148 | 16 % | $ 3,520 | $ 2,817 | $ 703 | 25 % | |
Loyalty program | 820 | 791 | 29 | 4 % | 2,451 | 2,291 | 160 | 7 % | |
Ancillary businesses | 161 | 212 | (51) | (24) % | 554 | 657 | (103) | (16) % | |
Miscellaneous | 310 | 277 | 33 | 12 % | 906 | 790 | 116 | 15 % | |
Other revenue | $ 2,374 | $ 2,215 | $ 159 | 7 % | $ 7,431 | $ 6,555 | $ 876 | 13 % | |
DELTA AIR LINES, INC. | |||||||
Total Revenue | |||||||
(Unaudited) | |||||||
Increase (Decrease) | |||||||
3Q24 vs 3Q23 | |||||||
Revenue | 3Q24 ($M) | Change | Unit Revenue | Yield | Capacity | ||
Domestic | $ | 8,652 | — % | (3) % | (2) % | 3 % | |
Atlantic | 3,029 | (3) % | (2) % | (3) % | (1) % | ||
Latin America | 779 | (1) % | (6) % | (6) % | 6 % | ||
Pacific | 647 | 16 % | (16) % | (13) % | 38 % | ||
Passenger Revenue | $ | 13,107 | — % | (4) % | (3) % | 4 % | |
Cargo Revenue | 196 | 27 % | |||||
Other Revenue | 2,374 | 7 % | |||||
Total Revenue | $ | 15,677 | 1 % | (3) % | |||
Third Party Refinery Sales | (1,083) | ||||||
Total Revenue, adjusted | $ | 14,594 | — % | (3.6) % | |||
DELTA AIR LINES, INC. | |||||||||
Statistical Summary | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, | September 30, | ||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | ||||
Revenue passenger miles (millions) | 66,310 | 64,095 | 3 | % | 185,757 | 174,586 | 6 | % | |
Available seat miles (millions) | 76,162 | 73,226 | 4 | % | 216,360 | 203,571 | 6 | % | |
Passenger mile yield (cents) | 19.77 | 20.47 | (3) | % | 20.50 | 21.04 | (3) | % | |
Passenger revenue per available seat mile (cents) | 17.21 | 17.92 | (4) | % | 17.60 | 18.05 | (2) | % | |
Total revenue per available seat mile (cents) | 20.58 | 21.15 | (3) | % | 21.30 | 21.53 | (1) | % | |
TRASM, adjusted - see Note A (cents) | 19.16 | 19.87 | (3.6) | % | 19.67 | 20.14 | (2) | % | |
Cost per available seat mile (cents) | 18.75 | 18.44 | 2 | % | 19.32 | 19.47 | (1) | % | |
CASM-Ex - see Note A (cents) | 13.30 | 12.59 | 5.7 | % | 13.48 | 13.13 | 3 | % | |
Passenger load factor | 87 % | 88 % | (1) | pt | 86 % | 86 % | — | pts | |
Fuel gallons consumed (millions) | 1,096 | 1,062 | 3 | % | 3,093 | 2,947 | 5 | % | |
Average price per fuel gallon | $ 2.51 | $ 2.76 | (9) | % | $ 2.64 | $ 2.76 | (4) | % | |
Average price per fuel gallon, adjusted - see Note A | $ 2.53 | $ 2.78 | (9) | % | $ 2.64 | $ 2.78 | (5) | % | |
DELTA AIR LINES, INC. | ||
Consolidated Statements of Cash Flows | ||
(Unaudited) | ||
Three Months Ended | ||
September 30, | ||
(in millions) | 2024 | 2023 |
Cash Flows From Operating Activities: | ||
Net Income | $ 1,272 | $ 1,108 |
Depreciation and amortization | 643 | 594 |
Changes in air traffic liability | (1,135) | (1,683) |
Changes in profit sharing | 321 | 417 |
Changes in balance sheet and other, net | 173 | 640 |
Net cash provided by operating activities | 1,274 | 1,076 |
Cash Flows From Investing Activities: | ||
Property and equipment additions: | ||
Flight equipment, including advance payments | (1,053) | (856) |
Ground property and equipment, including technology | (275) | (413) |
Purchase of short-term investments | — | (300) |
Redemption of short-term investments | 117 | 1,527 |
Acquisition of strategic investments | — | (152) |
Other, net | 88 | 63 |
Net cash used in investing activities | (1,123) | (131) |
Cash Flows From Financing Activities: | ||
Payments on debt and finance lease obligations | (263) | (724) |
Cash dividends | (96) | (64) |
Other, net | (13) | (12) |
Net cash used in financing activities | (372) | (800) |
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents | (221) | 145 |
Cash, cash equivalents and restricted cash equivalents at beginning of period | 4,507 | 2,824 |
Cash, cash equivalents and restricted cash equivalents at end of period | $ 4,286 | $ 2,969 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | ||
Current assets: | ||
Cash and cash equivalents | $ 3,969 | $ 2,835 |
Restricted cash included in prepaid expenses and other | 97 | 134 |
Other assets: | ||
Restricted cash included in other noncurrent assets | 220 | — |
Total cash, cash equivalents and restricted cash equivalents | $ 4,286 | $ 2,969 |
DELTA AIR LINES, INC. | ||||
Consolidated Balance Sheets | ||||
(Unaudited) | ||||
September 30, | December 31, | |||
(in millions) | 2024 | 2023 | ||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $ 3,969 | $ 2,741 | ||
Short-term investments | 8 | 1,127 | ||
Accounts receivable, net | 3,550 | 3,130 | ||
Fuel, expendable parts and supplies inventories, net | 1,467 | 1,314 | ||
Prepaid expenses and other | 2,068 | 1,957 | ||
Total current assets | 11,062 | 10,269 | ||
Property and Equipment, Net: | ||||
Property and equipment, net | 36,862 | 35,486 | ||
Other Assets: | ||||
Operating lease right-of-use assets | 6,686 | 7,004 | ||
Goodwill | 9,753 | 9,753 | ||
Identifiable intangibles, net | 5,977 | 5,983 | ||
Equity investments | 3,272 | 3,457 | ||
Other noncurrent assets | 1,756 | 1,692 | ||
Total other assets | 27,444 | 27,889 | ||
Total assets | $ 75,368 | $ 73,644 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities: | ||||
Current maturities of debt and finance leases | $ 3,324 | $ 2,983 | ||
Current maturities of operating leases | 772 | 759 | ||
Air traffic liability | 8,302 | 7,044 | ||
Accounts payable | 4,545 | 4,446 | ||
Accrued salaries and related benefits | 4,105 | 4,561 | ||
Loyalty program deferred revenue | 4,122 | 3,908 | ||
Fuel card obligation | 1,100 | 1,100 | ||
Other accrued liabilities | 1,848 | 1,617 | ||
Total current liabilities | 28,118 | 26,418 | ||
Noncurrent Liabilities: | ||||
Debt and finance leases | 14,373 | 17,071 | ||
Pension, postretirement and related benefits | 3,404 | 3,601 | ||
Loyalty program deferred revenue | 4,630 | 4,512 | ||
Noncurrent operating leases | 5,919 | 6,468 | ||
Deferred income taxes, net | 1,675 | 908 | ||
Other noncurrent liabilities | 3,603 | 3,561 | ||
Total noncurrent liabilities | 33,604 | 36,121 | ||
Commitments and Contingencies | ||||
Stockholders' Equity: | 13,646 | 11,105 | ||
Total liabilities and stockholders' equity | $ 75,368 | $ 73,644 | ||