Delta expects robust travel demand to boost profits

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Delta Air Lines has forecast stronger-than-expected profit in the fourth quarter as the carrier expects travel demand to remain robust despite growing risks of an economic recession, sending its shares higher.

The Atlanta-based carrier expects an adjusted profit of $1-$1.25 per share in the quarter through December, on a possible 9% jump in revenue from the same period in 2019. That's higher than a profit of 79 cents a share expected by analysts in a Refinitiv survey.

Delta said its third-quarter earnings were impacted by Hurricane Ian, which led to mass flight cancellation last month. Strong travel demand, however, generated the highest quarterly revenue in the company's history, it said. Its international passenger revenue has also recovered to 97% of 2019 levels, driven by demand for transatlantic flights.

Carriers, which are facing higher fuel and wage bills, have been relying on robust demand to mitigate inflationary pressure with higher fares.

 

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