Delta Air Lines posted record first-quarter revenue of $14.2 billion (approximately R267 billion at current exchange rates), beating analyst estimates despite a $2 billion surge in fuel costs driven by the Iran conflict.
Why it matters: Delta’s results are a bellwether for the global airline industry, and the ability to grow earnings through the worst fuel price shock in years signals that consumer demand for travel remains resilient.
The numbers
Delta earned $0.64 per share for the March quarter, exceeding Wall Street’s consensus estimate of $0.61. Pretax profit came in at $530 million, and free cash flow reached $1.2 billion.
Earnings rose more than 40% compared to the same quarter last year. Revenue of $14.2 billion beat estimates by $12 million.
The fuel challenge
The Iran war disrupted oil supply chains through the Strait of Hormuz, pushing jet fuel prices to their highest levels since 2022. Delta’s fuel bill for the quarter was $2 billion higher than the same period last year.
The airline absorbed the hit through higher fares, strong premium cabin demand, and operational efficiency. CEO Ed Bastian said demand remains strong across all cabin classes.
Market reaction
Shares surged as much as 13% in premarket trading on Wednesday. The broader airline sector rallied alongside Delta, with United Airlines and American Airlines rising 7% and 6.2% respectively.
The US-Iran ceasefire announced on 7 April sent oil prices plunging 14%, which could ease fuel costs significantly in the coming quarter if the truce holds.
Forward guidance
For the June quarter, Delta expects revenue growth in the low teens, an operating margin of 6% to 8%, and earnings per share between $1.00 and $1.50. The company said it expects to lead the industry with $1 billion of profit in the June quarter.