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Enilria - Delta Misses on Earnings As Fuel Hurts
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Delta was first to report Q3 earnings and they missed consensus slightly. Revenue for sure was not the problem, with a 16% revenue gain on flat capacity. Delta is largely achieving the flat capacity statistics through reducing their main coach cabin, while increasing premium classes which remove typical 1.5-3 seats for every swap, depending upon which premium cabin product is expanded. This is, however, increasing their exposure more and more to a potential saturation with the premium phenomena.
Delta lowered their earnings expectations for 2027 on higher fuel costs and guided for the current quarter.
Revenue momentum is continuing in the December quarter, with strength across all products and geographies, supporting our outlook for total revenue growth of approximately 20 percent over last year. With seats growing less than 2 percent, including a reduction in Main Cabin seats, our capacity positioning supports another quarter of sequential improvement in unit revenue with progression in both Domestic and International.
Delta touted growth in Latin and other regions. My sources say the Latin growth was largely "fools gold" driven by World Cup games in July that temporarily juiced performance from the region, but that real growth is much weaker.
Domestic unit revenue grew 16 percent year-over-year on strong yields and a load factor that was 1 point higher than last year, reflecting the strength of Delta's brand and a measured approach to capacity. International unit revenue increased 12 percent, with performance led by Latin where unit revenue improved 22 percent over last year. Transatlantic unit revenue growth improved 4 points sequentially to 11 percent year-over-year. Transpacific revenue grew 13 percent over prior year on 8 percent higher capacity, supporting profitable growth through new routes to Asia.
Delta was first to report Q3 earnings and they missed consensus slightly. Revenue for sure was not the problem, with a 16% revenue gain on flat capacity. Delta is largely achieving the flat capacity statistics through reducing their main coach cabin, while increasing premium classes which remove typical 1.5-3 seats for every swap, depending upon which premium cabin product is expanded. This is, however, increasing their exposure more and more to a potential saturation with the premium phenomena.
Delta lowered their earnings expectations for 2027 on higher fuel costs and guided for the current quarter.
Revenue momentum is continuing in the December quarter, with strength across all products and geographies, supporting our outlook for total revenue growth of approximately 20 percent over last year. With seats growing less than 2 percent, including a reduction in Main Cabin seats, our capacity positioning supports another quarter of sequential improvement in unit revenue with progression in both Domestic and International.
Delta touted growth in Latin and other regions. My sources say the Latin growth was largely "fools gold" driven by World Cup games in July that temporarily juiced performance from the region, but that real growth is much weaker.
Domestic unit revenue grew 16 percent year-over-year on strong yields and a load factor that was 1 point higher than last year, reflecting the strength of Delta's brand and a measured approach to capacity. International unit revenue increased 12 percent, with performance led by Latin where unit revenue improved 22 percent over last year. Transatlantic unit revenue growth improved 4 points sequentially to 11 percent year-over-year. Transpacific revenue grew 13 percent over prior year on 8 percent higher capacity, supporting profitable growth through new routes to Asia.
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