Delta Air Lines continues to see corporate sales grow, executives said during a Thursday third-quarter earnings call.
Managed corporate travel sales during the quarter were up 7 percent year over year, Delta president Glen Hauenstein said. That increase was “led by double-digit growth in coastal hubs with broad-based strength across sectors,” he added. In particular, Delta noted in an earnings release double-digit growth in the tech, media and banking sectors.
At an analyst conference in September, Hauenstein had said that overall business travel, which includes managed and unmanaged travel, was “already way above where it was pre-pandemic,” and that managed travel was back at 2019 levels, and “now going beyond that.”
As in the past, Delta surveyed its corporate customers prior to its earnings call. The recent survey “indicates a positive outlook for business demand with 85 percent of respondents indicating they expect their travel spend to grow in 2025,” Hauenstein said.
Executives also noted that consumers are continuing to “prioritize premium experiences.” During the quarter, premium revenue growth outperformed the main cabin by 9 percentage points, Hauenstein said. Year to date, 57 percent of Delta’s revenue has been generated outside of selling main cabin seats, he added.
In addition, loyalty revenue was up 6 percent year over year driven by award redemptions and growth in co-brand card spend, Delta said. Hauenstein added that there was growth in SkyMiles memberships, and “American Express remuneration for the quarter was $1.8 billion, up 6 percent year over year.”
Delta Q3 Metrics
Delta reported third-quarter passenger revenue of $13.1 billion, about even with 2023 Q3 figures. Total revenue was nearly $15.7 billion, up about 1 percent year over year. Net income was nearly $1.3 billion, a 15 percent increase from a year prior. Capacity, as measured in available seat miles, increased 4 percent year over year. Average fuel costs were $2.51 per gallon.
The carrier disclosed that the July CrowdStrike IT outage had a financial effect on the quarter including a $380 million loss in revenue and a non-fuel expense impact of $170 million. Fuel expenses were $50 million lower than they would have been because of the 7,000 flight cancellations over the five-day period.
Guidance for the fourth quarter included an increase of 2 percent to 4 percent year over year in revenue, a capacity increase of 3 percent to 4 percent, and average fuel costs of $2.20 to $2.40 per gallon.
Delta also projects a 1 percentage-point negative effect to total unit revenue from reduced travel demand around the U.S. elections in November.
“It’s really obvious to see the trend lines where you have markets that are performing incredibly well with positive momentum in October, then again as soon as the week after the election is complete, and on into December and really all the way into January,” Hauenstein said. “If you took [that] trend line, you would see these two weeks just being way off trend … [and] underperforming the trends before and after those weeks.”
