Delta Air Lines (NYSE: DAL) reported first-quarter adjusted operating revenue of $14.2 billion, a 9.4% increase over the prior year and a record for the March quarter.
The strong top-line result came even as the carrier absorbed what it described as the highest quarterly fuel expense in its history, pressuring margins heading into the spring travel season.
Delta’s stock initially held firm following the earnings release before sliding as investors absorbed the full weight of second-quarter guidance that trailed earlier analyst expectations.
“Total revenue of $14.2 billion was a March quarter record and nearly 10 percent higher than last year, growing several points above our initial outlook, on broad demand strength across corporate and leisure,” said Joe Esposito, Delta’s chief commercial officer.
CEO Ed Bastian struck a confident tone on the results, saying, “We delivered earnings that were more than 40% higher than last year, even with a significant increase in fuel costs and operational disruptions across the industry.”
Premium ticket revenue, covering first class and other upgraded cabin options, rose 14% year-over-year in the first quarter, while main cabin revenue increased for the first time since late 2024.
Corporate sales hit a record for the quarter, with double-digit year-over-year growth across all sectors, led by Banking, Aerospace and Defense, and Technology.
Jet fuel prices in major U.S. cities surged nearly 88% between February 27 and April 6, according to the Airlines for America industry group citing Argus data, following U.S. and Israeli military strikes on Iran on February 28.
Delta said its fuel bill will be $2 billion higher this quarter because of the spike in costs, a figure that significantly complicates the carrier’s near-term financial planning.
Bastian said the airline will “meaningfully reduce” its capacity growth plans in the near term as fuel costs soar, joining a broader pullback across an industry rattled by the historic run-up in jet fuel prices tied to the Middle East conflict.
For the second quarter, Delta forecast adjusted per-share earnings of $1 to $1.50, compared with the $1.41 per share analysts had been expecting, with revenue projected to rise in the “low-teens” percentage range versus a year earlier.
That revenue outlook exceeded Wall Street’s roughly 10% growth forecast, offering some optimism even as the earnings range left room for disappointment at the lower end.
Delta projected approximately $1 billion in pretax profit for the second quarter, falling well short of the $1.5 billion to $1.8 billion range analysts had estimated before the fuel spike reshaped the outlook.
The company also expects to receive a $300 million benefit from its refinery near Philadelphia, a facility it acquired from Phillips 66 in April 2012 that has become a key hedge against volatile jet fuel markets.
