Growth in transatlantic travel sets record for Delta Air Lines earnings

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Delta Air Lines reported the highest revenue and earnings in its history on Thursday, with a 65 percent increase in sales of transatlantic flights, providing a significant boost to the company’s top line.

The Atlanta-based carrier raised its full-year guidance to $6 to $7 per share for the second time in less than three weeks, after beating Wall Street’s earnings expectations.

Chief executive Ed Bastian said, “Wherever you go in Europe these days, you’re going to see a large number of Americans.” “They haven’t been able to get there in four years, and there’s a lot of pent-up demand that’s going to be strong for a while.”

“We’re not seeing much of a slowdown in the fall,” Bastian said. Historically, the airline flew fewer flights to Europe after a busy summer, but this year “we’re extending the season a little longer because of demand”.

Delta’s transatlantic capacity surpassed pre-coronavirus pandemic levels late last year, with the airline adding seats and flights faster than on domestic routes. Bastian said four out of five of the carrier’s transatlantic tickets were purchased from the US during the quarter, with top destinations including Spain, Italy, Greece and the south of France.

Airlines have benefited from strong demand for travel since the pandemic subsided, giving them pricing power even as they grapple with staffing, jet shortages and air traffic controllers. Delta said three months ago it would cut its summer flight schedule by 2 percent to avoid operational shortfalls.

Because domestic flying recovered faster than international flying, which is now improving, conditions in the third quarter were “more attractive for Delta, United and American than for domestic growth airlines,” said analyst Connor Cunningham of Melius Research. Seen

While Delta’s revenue from domestic flights rose 8 percent to $8.9 billion, revenue from transatlantic flights rose 65 percent to $2.8 billion. Growth on Pacific routes was even stronger – 175 percent to $532 million – while revenue from Latin American routes grew 24 percent to $926 million.

Delta reported record adjusted operating income of $2.5 billion in the second quarter, up 73 percent from earnings per share of $2.68 a year ago, which topped Wall Street’s expectation of $2.40. Its adjusted revenue rose 19 percent to a record $14.6 billion.