Delta Earnings: Growth Leveling Off With High Altitude Costs; Fair Value Estimate Down $6 to $34

Delta reported final 2023 earnings and provided 2024 expectations that support our thesis that the airline industry is not returning to its pre-COVID-19 "goldilocks" era. The airline is operating at similar capacity levels to 2019, with 10% more staff and nearly 3.5 cents more in structural unit costs. Management reined in its expectations for 2024 capacity growth and said the company will shift focus to “optimizing” the routes and fares it operates, meaning it will look to increase their profitability.