Delta (DAL) Q1 2026 Earnings Call Transcript

Wednesday, Apr. 8, 2026 at 10:00 a.m. ET Vice President, Investor Relations — Julie Stewart Chief Marketing and Communications Officer — Tim Mapes Ed Bastian: Thank you, Julie, and good morning, everyone. Thank you for joining us. Before we begin, I want to acknowledge the ongoing conflict in the Middle East. Our thoughts are with all those affected and we remain hopeful for a peaceful resolution. Turning to our performance for the March quarter. Our results underscore the power of Delta s brand and the durability of our financial foundation. We delivered earnings that were 40% higher than last year and consistent with our January guidance even with the significant step-up in fuel and several external headwinds. Our strong results were driven by record revenue, which grew nearly 10%, increasing more than $1 billion over last year. Demand was broad-based across corporate and leisure, with continued momentum in high-margin, diverse revenue streams. As a result, we delivered a pretax profit of $530 million and earnings of $0.64 per share, with $1.2 billion of free cash flow and a 12% return on invested capital. Our results are powered by the Delta people who will always be our greatest competitive advantage, and I want to thank all 100,000 members of the Delta team for their commitment to delivering for our customers each and every day. For the seventh year, Delta s people-first culture has earned a place on the Fortune 100 Best Companies to Work For list, moving into the top 10 for the first time. When Delta succeeds, so do our people. In February, we celebrated $1.3 billion in profit-sharing payouts. Similar to last year, this was more than the rest of the industry combined. Looking at the current environment, demand remains strong. The acceleration we saw in March is carrying forward into the June quarter. Over the last month, cash sales, which are the clearest indicator of demand, are up double digits, with strength across the booking curve, geographies and products. Our consumers are continuing to prioritize experiences, with travel among the top spending categories. We are seeing this in continued double-digit spend growth on the Delta American Express Card portfolio, building on last year s double-digit growth. Combined with strong corporate trends, our customer base is showing greater resilience to macro and geopolitical uncertainty. The war in the Middle East has driven an unprecedented spike in jet fuel with prices roughly double what they were earlier in the year. In this environment, our focus is on what we can control, running a reliable operation, taking care of our people and customers, and protecting our margins and cash flow. As part of that, we are meaningfully reducing capacity in the current quarter with a downward bias until we see the fuel situation improve. At the same time, we re moving quickly to recapture higher fuel prices. With much of the industry still struggling to earn its cost of capital, there s a high sense of urgency to address higher fuel and reduce unprofitable flying. Over my career, I ve seen many periods of disruption in this industry. And time and again, high fuel prices have been the most powerful catalyst for change, separating the winners and forcing weaker players to rationalize, consolidate or be eliminated. Delta is navigating from an advantaged position. We have the best-in-class brand with a loyal, resilient and financially healthy customer base. Our financial foundation transcends the industry, built on double-digit returns, durable cash flow and an investment-grade balance sheet. And we own a refinery that provides a partial offset to elevated refining margins. Based on current demand trends, we expect low-teens revenue growth in the June quarter, recapturing 40% to 50% of the more than $2 billion of fuel headwind in the quarter. With that, we expect to deliver 6% to 8% operating margin with a pretax profit of $1 billion. Dan will talk more about the components of our outlook. And while it s still early to update the full year outlook, our structural advantages and execution keep us on track to achieve our long-term financial targets. So while higher fuel is a current impact to earnings, I m confident this environment ultimately reinforces Delta s leadership and accelerates our long-term earnings power. 26 will be another opportunity to demonstrate how much we have structurally improved our business and reduced earnings volatility relative to prior cycles and to the industry. That also shows up in how we operate and serve our customers. We ve long been recognized as the industry leader in reliability. In this quarter, Cirium named Delta The Most On-Time Airline in North America, for the fifth consecutive year. That reflects the strength of our operation and the pride that our teams take in delivering for customers. At the same time, over the past several months, particularly following severe weather, our reliability and recovery haven t met consisten

Delta (DAL) Q1 2026 Earnings Call Transcript

Key takeaways

Also covered by

Delta (DAL) Q1 2026 Earnings Call Transcript

Key takeaways

Also covered by

More in business