Delta Air Lines reduced its 2026 profit forecast amid persistently high fuel prices, while CEO Ed Bastian said rising fares have not discouraged travelers.
On Friday, Delta projected full-year adjusted earnings per share ranging from $5.10 to $5.60, down from its July forecast of $6.50 to $7.50 a share when fuel prices were lower. The airline also noted that its fourth‑quarter guidance fell short of analyst expectations.
Delta lowered its free‑cash‑flow forecast for the year to $2.5 billion, compared with the up to $4 billion it had anticipated in July.
Bastian added in an interview that fares continue to rise as the airline offsets much of this year’s $6 billion fuel‑cost increase, and that bookings remain strong. He noted that jet fuel prices in the U.S. Gulf of Mexico have nearly doubled, climbing to $4.34 per gallon on Thursday from $2.19 a year earlier, per FactSet.
“Consumer demand remains strong,” he said. “We’re seeing it across all channels, every cabin class, every geography, and both business and leisure travel.”
Delta projects a 20% revenue increase for the fourth quarter versus the same period last year, exceeding the 16% growth recorded in the third quarter after adjusting for the benefit from its Trainer, Pennsylvania refinery, which processes crude oil into jet fuel and other products and gives the carrier a competitive edge.
“Obviously, fuel pricing and its volatility play a role,” Bastian said.
Delta is the nation’s most profitable airline and the first carrier to release third‑quarter results, which cover the peak summer travel period.
Costs continued to pressure earnings. The spike in fuel prices since the Iran conflict began in February has weighed on airline profitability, even as carriers exercise pricing power. September’s inflation data showed airfares have risen more than 23% year‑over‑year.
Here’s how Delta’s third‑quarter results stacked up against Wall Street’s consensus estimates from LSEG:
- Earnings per share: $1.72 adjusted vs. $1.75 expected
- Adjusted revenue: $17.59 billion adjusted vs. $17.67 billion expected
This marked the first miss of estimates in two years.
Delta posted net income of $756 million, or $1.15 per share—a 47% decline from $1.42 billion, or $2.17 per share, a year earlier. After adjusting for one‑time items, earnings came to $1.76 per share.
After stripping out revenue from its refinery, maintenance operations and profit‑sharing, total revenue increased 16% year‑over‑year to $17.59 billion. Operating revenue surged 21% in the quarter to $20.19 billion.
Premium revenue, now a bigger share of total sales, rose 18% in the third quarter to $6.82 billion, whereas main‑cabin sales grew just 12% to $6.8 billion.
Delta, which launched free Wi‑Fi across its fleet nearly four years ago, said it will add Amazon Leo satellite internet to its aircraft as airlines seek to provide onboard service comparable to living‑room broadband.
Last week, SpaceX CEO Elon Musk took to X to criticize Bastian, claiming the Delta chief would “lose his job over this” after the View from the Wing travel blog reported that Bastian told employees at an internal meeting, “We don’t want to be associated with Elon Musk. Trust me.”
SpaceX’s Starlink Wi-Fi has become the main supplier of satellite Wi-Fi, with airline partnerships that include United Airlines, American Airlines, Southwest Airlines and Alaska Airlines, as well as others around the world.
Delta’s Bastian dismissed the notion of a personal feud with Musk on Friday, telling CNBC’s Phil LeBeau that “everyone is entitled to their opinion.”
“There’s no tit‑for‑tat on my end,” Bastian said. He added that Delta had engaged with SpaceX six years earlier, but the discussions “weren’t ready to scale.”