Oct 9, 2026 earnings call — Delta reports durable profits amid high fuel costs
Delta delivered pretax profits of $1.5 billion while absorbing $1.6 billion of higher fuel costs this quarter.
Revenue $20.2B (est $17.6B) · EPS $1.72 (est $1.77)
Key quotes
"The Delta American Express partnership continues to deliver strong momentum and we now expect remuneration of more than $9 billion this year on the way to 10 billion."
"Based on the full fuel curve as of October 2, our all in fuel price for the fourth quarter is projected to be $4.25 per gallon. Including a refinery benefit of approximately $0.40 per gallon."
"Over the summer, we widened our industry leadership and on time performance, and delivered record baggage results and better disruption recovery."
Analyst Q&A 15
Why CASM-ex remains above target
Q (Andrew Didora · BofA): Analyst asked why CASM-ex keeps missing the low single-digit target and how to think about it given IROP issues and capacity investments.
A: Management said there are three reasons: operational investments, capacity discipline, and higher revenue-related costs. They called the operational and capacity choices deliberate to improve reliability and revenue quality and said there is a path back to low single digit cost growth as capacity normalizes.
"And on our operational investments and capacity discipline, these have been deliberate choices and the right decisions" — Erik Storey Snell (CFO)
Drivers of strong revenue and loyalty
Q (Savi Syth · Raymond James): Analyst asked what drives the strong year-over-year revenue and RASM outlook and why loyalty is performing better than peers.
A: Management said demand is very strong and booking is already greater than 60% for the fourth quarter, supporting their 20% revenue growth guidance. They also said premium products and loyalty engagement are strong, helped by higher fares and partnerships.
"When you look at the fourth quarter on the sequential improvement and 20% revenue growth, we are already greater than 60% booked for the quarter." — Joe Esposito
Competitive capacity domestic and international
Q (Mike Linenberg · Deutsche Bank): Analyst asked about competitive capacity trends domestically and internationally and whether competitors might cut capacity as energy prices rise.
A: Management said domestic competitive capacity in their hubs is down and that carriers have removed capacity to improve margins and operations. On international, they expect hedges rolling off will force global carriers to manage for margins, which they view positively going into the fourth quarter.
"So and in our hubs, competitive capacity is actually positioned down." — Joe Esposito
Confidence in mid-teens margins long term
Q (Conor Cunningham · Melius): Analyst asked what changes give confidence in the mid-teens margin framework going forward and about balancing load factor and yields.
A: Management said customers accepted higher prices and that sustaining the new revenue baseline is key; they expect the environment to change as fuel normalizes and see operational and nonfuel cost improvements. They also said they are balancing load factors and yields by supplying more premium seats and managing for margins, which has kept outcomes favorable.
"I think you are gonna see a different environment" — Edward H. Bastian (CEO)
Cabin mix and MRO outlook
Q (Tom Fitzgerald · TD Cowen): Analyst asked about next year's mix between premium and main cabin seats and how delivery schedules might affect it, and about MRO expectations for 2027.
A: Management said they expect a very similar balance between premium cabins and main cabin next year and remain flexible around deliveries. On MRO, they expect double-digit revenue growth from a record backlog and aim for steady margin expansion, targeting at least 100 basis points of improvement per year.
"We will see, very similar balance between the premium cabins and main cabin." — Joe Esposito
Non-ticket revenue growth and mix
Q (Duane Pfennigwerth · Evercore): Analyst asked how much of revenue growth is coming from non-ticket streams like cargo, loyalty, and partnerships and whether that growth is sustainable relative to capacity.
A: Management said diversified revenue streams are growing faster than capacity, with cargo up 29% and loyalty up 18% in the quarter and other products growing at higher rates. They noted these streams have higher contribution margins and are embedding strong revenue performance this year.
"When you look at you know, cargo up 29% and loyalty up 18% in this quarter, Insurance, while it is a small amount of money, those are growing at much higher rates than capacity." — Joe Esposito
Strategy and growth in Seattle
Q (John Godyn · Citi): Analyst asked how Delta plans to compete and grow in Seattle given a competitor's expansion there.
A: Management said Seattle is an important market with strong premium demand and transpacific gateway value, and Delta will continue to invest in capacity and premium products there. They emphasized focusing on premium traffic and adding international service while noting Seattle is large enough for multiple carriers.
"Continuing to focus on that premium traffic for Seattle is really our Northern star." — Joe Esposito
CASM-ex outlook for next year
Q (Chris Wetherbee · Wells Fargo): Analyst asked if operational investments will allow absolute CASM to fall in 2027 or only normalize growth.
A: Management said they are at the peak of CASM now and expect improvement as they lap investments, but the investment costs stay in the baseline. They advised planning on a low single digit cost growth as they continue investments for customers and efficiency.
"We are at the peak of our CASM right now." — Erik Storey Snell (CFO)
Corporate demand and Transpacific opportunity
Q (Michael Goldie · BMO): Analyst asked about the strength of corporate demand and Delta's opportunity and competition in Transpacific business travel to Asia.
A: Management said corporate demand is very resilient and the economy is very strong, so business travel remains healthy. They added that adding service to more Transpacific economies moves corporate traffic to Delta and they have seen corporate customers shift to Delta when new markets open.
"And the economy is very strong. So business wants to travel." — Joe Esposito
Monetizing SkyMiles and fuel surcharges
Q (Jamie Baker · JPMorgan): Analyst asked whether Delta would consider partial monetization of SkyMiles and about industry fuel surcharges by day of week.
A: Management said they are reluctant to put a third party between Delta and its customers and value keeping loyalty in-house to protect brand and customer preference, though they did not rule out future consideration. Regarding fuel surcharges, management said they have not moved to day-of-week fuel surcharges and will watch where the industry goes.
"I am I am really reticent to put a third party, a financial investor, between us and our best customers and preference." — Edward H. Bastian (CEO)
AI shopping agents and early 1Q bookings
Q (Atul Maheswari · UBS): Analyst asked whether AI shopping agents are a net positive or negative and how Delta will protect its brand, and also asked for early 1Q booking color.
A: Management said they will be cautious about who accesses their inventory and view brand and concierge/agent solutions as important to protect customer relationships in the agentic economy. They also said early indications from 1Q bookings look very similar to 4Q and they feel positive about forward bookings.
"Early indications from 1Q are very similar to 4Q." — Joe Esposito
Operational reliability investments and labor
Q (Brandon Oglenski · Barclays): Analyst asked what is driving the baseline increase for operational reliability (reserve crews, etc.) and how to balance pay and margins in labor negotiations.
A: Management said the primary focus of investment has been crew resiliency to improve controllable completion factor, using process, technology, data, and resources to manage demand and churn during disruptions. On negotiations they would not comment but said they need a reliable operation baseline before making far-reaching contract decisions.
"But the real focus has been on that crew resiliency." — Daniel Charles Janki (COO)
Key margin drivers into 2027
Q (Catherine O'Brien · Goldman Sachs): Analyst asked for high-level puts and takes on margin progression into 2027 aside from fuel.
A: Management said the biggest issue is fuel volatility and where it normalizes, but they also have many levers within their control like upgauging, new fleet, and operational improvements. They said holding the revenue gains and executing on controllable improvements should support progress toward their long-term margin framework if fuel cooperates.
"The biggest thing is trying to get to the other end of this volatility that we have seen in fuel and see where that normalizes." — Edward H. Bastian (CEO)
Paid premium demand and upgrades
Q (David Vernon · Bernstein): Analyst asked how paid premium demand and fare differentials evolve as Delta adds more premium seats and whether buy-ups are impacted.
A: Management said premium demand is very strong: capacity in premium is up 6%, 7% while loads rose almost 2 points, and fares moved up without discounting. They also said merchandising across cabins has driven positive upgrade take and that they are early in this process heading into 2027.
"As we said, as we are growing capacity, 6%, 7%, our loads went up almost 2 points." — Joe Esposito
Upsell revenue size and IT savings
Q (Seaport Global): Analyst asked for the size of upsell/upgrade revenue and whether moving legacy systems in-house could save costs in software/AI era.
A: Management said upsell is a fast-growing segment but they are early in understanding it and declined to give exact sizing, while noting premium-side upsell started full scale only this past quarter and into next year. On IT, management said moving to the cloud years ago has been a significant source of efficiency and productivity and they work with outside partners as needed.
"Is a fast growing segment, and we are really early in this process of understanding the cabin." — Joe Esposito