Delta’s First-Quarter Outlook Exceeds Expectations, CEO Ed Bastian Says 2024 Will Be Best Year in History
Delta Air Lines’ first-quarter outlook topped analyst expectations on Friday as the carrier forecast strong travel demand to start the year, said CEO Ed Bastian on CNBC’s Power Lunch. Delta expects to generate over $4 billion in free cash this year, an 18% increase from 2024, which would put it in the midpoint of its annual target of between $3 billion and $5 billion.
Bastian stated, “We feel quite good coming into the new year. Everywhere, we see consumers continue to prioritize experience over goods.” This sets up Delta for “our best financial year in our history,” he added.
In the three months ended December 31, Delta’s earnings per share came in at $1.85, exceeding the $1.75 expected by analysts, while revenue of $14.44 billion was higher than the $14.18 billion predicted. Delta also expects a 7% to 9% increase in revenue for the full year, ahead of the roughly 5% growth analysts had forecast.
Delta is the first major US carrier to report earnings this quarter, and its strong performance comes as airlines have enjoyed strong post-pandemic travel demand, with analysts predicting it will continue this year. The company has capitalized on a boom in premium travel, with demand for products such as roomier seats and rewards credit cards continuing to rise.
Delta’s shares were up over 8% in afternoon trading, with airline stocks having rallied in recent months. Delta’s rival, United Airlines, has seen its shares gain over 130% over the past 12 months, while Delta’s shares are up over 45% in that period.
In the fourth quarter, Delta’s American Express partnership brought in $2 billion, up 14% from the year-earlier period. Revenue from premium seats, such as first class and premium economy, rose 8% to $5.2 billion, while main cabin ticket revenue increased by 2% to about $6 billion. Unit revenue, a measure of how much revenue an airline generates for each passenger, rose 4% in the quarter compared to 2023.
