delta airlines has lowered its profit forecast for 2026 as fuel prices continue to rise, but CEO Ed Bastian said higher fares were not putting off travelers.
Delta on Friday expected full-year adjusted earnings of $5.10 to $5.60 per share, compared with the forecast in July, when fuel prices were low, of $6.50 to $7.50 per share. The company’s fourth quarter outlook also fell short of analysts’ expectations.
Delta lowered its free cash flow outlook for this year to $2.5 billion from the $4 billion it had expected in July.
Still, Bastian said in an interview that fares continue to rise and travelers continue to book as airlines anticipate a $6 billion increase in fuel costs this year.
“Consumer response continues to be very strong. We’re seeing it across all channels, across all serviced rooms, across all geographies, business and leisure,” he said.
Delta Air Lines expects fourth-quarter revenue to rise 20% from a year ago, more than the 16% increase in the third quarter, after adjusting for profits from its Trainer, Pennsylvania, refinery that refines crude oil into jet fuel and other products, giving it an edge over other airlines.
“Obviously fuel prices, fluctuations in fuel prices have something to do with that,” Bastian said.
Delta Air Lines, the nation’s most profitable airline, reported for the first time its results for the third quarter, which includes the busy summer season.
Costs continued to weigh on profits. Fuel prices have soared since the Iran war began in February, squeezing airline profits despite the flexibility airlines have in adjusting their pricing rights. Airfares rose more than 23% year-on-year, according to the latest inflation figures released in September.
Here’s how the company reported in the third quarter compared to Wall Street’s expectations, based on LSEG’s consensus estimates.
Earnings per share: $1.72 adjusted vs. $1.75 expected Adjusted earnings: $17.59 billion adjusted vs. $17.67 billion expected
Delta reported net income of $756 million, or $1.15 per share, down 47% from $1.42 billion, or $2.17 per share, in the year-ago period. Adjusted for one-time items, Delta Air Lines reported profit of $1.76 per share.
Adjusting for sales from refineries, maintenance operations and profit sharing, sales rose 16% year over year to $17.59 billion. Operating revenue for the third quarter increased 21% to $20.19 billion.
Delta Air Lines’ premium income as a percentage of total sales rose 18% to $6.82 billion in the third quarter, but main cabin sales rose only 12% to $6.8 billion.
