Delta Reports $1.1 Billion Profit and Record Third-Quarter Revenue

Delta Air Lines brought in a record $15.49 billion in third quarter revenue, but is nearing the end of a period of rapid growth during the rebound in travel from the COVID-19 pandemic.

Atlanta-based Delta reported $1.1 billion in net income for the July-to-September quarter, up from its $695 million profit a year ago.

That shows “robust demand for travel on Delta,” according to Delta president Glen Hauenstein in a written statement.

Operating revenue was up 11% year-over-year, while operating expense was up 8% to $13.5 billion.

In an investor update last month, Delta acknowledged that higher-than-expected fuel costs and maintenance expense would cut into its profits for the third quarter

But the company still expects full-year pre-tax earnings of more than $5 billion, and has so far accrued more than $1 billion toward profit sharing to be paid out to employees next February 14.

The airline has continued to add back flight capacity with 16% growth year-over-year. Sky-high air fares drove up Delta’s unit revenue last year, while this year the company saw a decline in unit revenue in the third quarter compared with a year ago.

Delta CEO Ed Bastian said it’s not a sign that customers are losing interest in travel.

“You can see our planes are full on a daily basis,” he said. “It’s really just the dynamics of adding so much supply into the market and the ability for the market to digest it all.”

Delta’s overall flight capacity is nearly back to pre-pandemic levels, and the company now has 10% more employees than it did before slashing its payroll during the COVID-19 crisis. It has nearly 100,000 employees today, Bastian said.

“We’re to the point of stability,” he said. “Next year we’re going to be in a more normalized level of growth.”

Still, some parts of Delta’s system are not yet fully restored to pre-pandemic flight schedules – including at the airline’s biggest hub, Atlanta.

“We’re continuing to build into Atlanta,” Bastian said. “Sometime next year, we should be pretty much back.”

Delta has drawn the ire in recent weeks of frequent fliers frustrated with an announcement last month of much higher thresholds to qualify for elite SkyMiles status and new restrictions on entering Sky Clubs.

When asked whether the changes have had an effect on bookings or led to increased Delta credit card cancellations, Bastian said “we haven’t really seen any changes in trajectories.”

Bastian said at a Rotary luncheon in Atlanta more than two weeks ago that the company would make some modifications in response to the customers.

“We’re listening to that feedback,” he said this week. “We’ll be announcing something in the coming days as to what we’re going to be doing, but hopefully it’ll be responsive to some level of feedback.”

The challenge Delta has been trying to address is that so many frequent fliers are in the airline’s elite-level tiers that there are long queues for priority access and overcrowded Sky Clubs. “A lot of people have different ideas as to how to deal with it,” Bastian said.

©2023 The Atlanta Journal-Constitution. Visit at ajc.com. Distributed by Tribune Content Agency, LLC.