Delta's stock jumps as travel demand accelerates, leading to record revenue

By Tomi Kilgore and Steve Gelsi

Air carrier's push to sell premium options is paying off, as most customers who pay up for better seats don't go back to cheaper ones

Delta's stock surged, lifting those of its peers, after the air carrier beat earnings expectations on accelerating travel demand.

This story has been updated to remove an incorrect attribution on a quote from Delta President Glen Hauenstein.

Delta Air Lines Inc.'s stock surged Thursday, after the air carrier's third-quarter report was a pleasant surprise for investors, as profit and revenue rose well above expectations and there were signs of a strong holiday travel season.

Delta (DAL) also raised its full-year earnings outlook, amid strong demand for premium seating and services and for corporate travel.

"Sales trends have accelerated across all geographies and in every advance-purchase window," President Glen Hauenstein said in a statement.

The stock rose 4.3% to close at $59.57, which made it the third-biggest gainer in the S&P 500 index SPX. The results also provided a boost to United Airlines Holdings Inc. shares (UAL), which advanced 3.3%, while American Airlines Group Inc.'s stock (AAL) reversed an earlier gain of as much as 5.8% to close down 1.6%.

"Ahead of earnings, headlines around the government shutdown and concerns on the consumer derailed investor confidence in airlines," Melius Research analyst Conor Cunningham wrote in a note to clients. "Delta's results today should calm many of those fears for the company as investments in the product and network continue to pay dividends."

A customer-retention rate in the mid-80% range for roomier and more expensive seats with higher profit margins, along with Delta's focus on more affluent consumers, is driving optimism for more growth, the company said.

Hauenstein said on the post-earnings conference call with analysts that he believes there's still a "long runway" for the premium side of the business. "Once people get used to traveling in a certain product...they tend not to go back," he added.

The carrier is adding more premium seating in new jets on order and retrofitting older planes as well, with the expectation that revenue from its higher-end products will overtake revenue for economy seating by 2027.

Chief Executive Ed Bastian played down the effects of the government shutdown. Regarding reports that the shutdown was causing delays, due to labor shortages, Bastian said on CNBC said the number of delays was about the same as before the shutdown.

He said that the shutdown was resulting in less than $1 million per day in lost revenue, and was not having a material effect on business.

In its fiscal third quarter, the carrier managed through a dip in travel by European and Canadian residents flying into the U.S. by looking to boost its domestic business, with a focus on pricing, he noted.

Delta said operating revenue rose 4.1% from the same period a year ago to a September-quarter record of $15.2 billion. The average analyst revenue estimate compiled by FactSet was $15.08 billion.

Passenger revenue in the U.S. increased 5%, as revenue from both premium cabins and SkyMiles members increased 9%. There was also a recent acceleration in corporate sales, which rose 8%, as surveys indicated that about 90% of companies expected travel volume to either increase or remain steady in 2026.

Main-cabin ticket revenue fell 4% to $6.06 billion, but the company said it's seeing an inflection point for better results looking ahead.

Net income rose 11.4% to $1.42 billion, while adjusted earnings per share were up to $1.71 from $1.50 and beat the FactSet consensus of $1.53.

For the full year, the company said it now expects EPS of about $6, which is above the midpoint of the previous guidance range of $5.25 to $6.25.

While it's a little early, "it's looking good" for the holiday travel season, Bastian said in an appearance on CNBC.

Delta's premium-seating offerings include Comfort+, Delta Premium Select and Delta One. Meanwhile, carriers that have focused on the economy customer have been struggling, Hauenstein said.

"When you think about the financial performance of the carriers that are catering to the lower-income customers, they have not been good, and some had to declare bankruptcy," he noted.

Read: Spirit Airlines is going bankrupt. This rival is already reaping the benefits.

While Delta's stock has slipped 1.5% in 2025, shares of budget airline Frontier Group Holdings Inc. (ULCC) have tumbled 41.8% and shares of low-fare carrier JetBlue Airways Corp. (JBLU) have slid 41.5%.

-Tomi Kilgore -Steve Gelsi

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10-09-25 1631ET