Nurphoto | Nurphoto | Getty Images
Delta Air Lines on Tuesday raised its second-quarter forecast and estimated full-year adjusted earnings of $6 a share, on the high end of estimates it gave last April as strong travel demand and trade-ups to dearer fare classes proceed to drive growth.
Delta forecast adjusted earnings per share of $2.25 to $2.50 for the second quarter, up from a previous range of $2 to $2.25 a share. CEO Ed Bastian said the corporate’s second-quarter earnings, which it’s scheduled to report next month, could possibly be its highest ever for the April-June period.
“The demand as you understand, as anyone that is traveling knows, is off the chain,” Bastian said in an interview with CNBC’s “Squawk Box.”
In an investor day presentation Tuesday, the airline also raised its estimate without cost money generation this 12 months to $3 billion from $2 billion. Delta reinstated its quarterly dividend earlier this month.
Delta and its rivals have reported strong travel demand, particularly for international trips, while other sectors have struggled as consumers grapple with inflation and other challenges. The airline industry has also faced growth constraints due to air traffic controller shortages, delays in latest aircraft and shortfalls of latest pilots, helping keep fares firm.
But along with resilient demand, airlines are also having fun with jet fuel prices which are down about 30% from a 12 months ago.
And, Delta on Tuesday forecast revenue per available seat mile, a gauge of how much money an airline is generating for a way much it’s flying, to be up as much as 18% over last 12 months, a rise from a previous forecast of 15% to 17% growth.
The airline has repeatedly touted customers’ willingness to purchase as much as dearer seats, from those with extra legroom to top notch. Premium revenue will are available in at about $19 billion this 12 months, a 35% share of total revenue, up from a 24% share in 2014.
The carrier also said its lucrative partnership with American Express bank cards continues to grow, generating an estimated $6.5 billion this 12 months compared with $4 billion in 2019.
Delta shares were up greater than 3% in mid-morning trading Tuesday.
