Delta Airlines Revenue Sky High as Leisure and Business Travel Boom

Wednesday, April 10, 2024

Delta Air Lines (Ticker: DAL) announced its earnings for the first quarter today and provided an outlook for the second quarter. The detailed financial performance for the first quarter, including both standard and adjusted figures, can be found on page five and are summarized in this announcement.

Ed Bastian, the CEO of Delta, expressed his gratitude towards the 100,000 employees for their unparalleled dedication, which has led to the highest level of operational dependability in the company’s history, setting them apart from competitors. He was pleased to announce that the airline celebrated this achievement with profit-sharing bonuses totaling $1.4 billion during the quarter.

In the first quarter, Delta achieved unprecedented revenue due to its superior operational execution, which drove significant earnings growth. The company anticipates maintaining this strong growth trajectory into the second quarter, expecting to hit new revenue highs, achieve an operating margin in the mid-teens, and report earnings between $2.20 and $2.50 per share. Delta remains optimistic about meeting its annual earnings forecast of $6 to $7 per share and generating free cash flow between $3 and $4 billion.

First Quarter 2024 GAAP Financial Highlights:

• Generated $13.7 billion in operating revenue.
• Achieved an operating income of $614 million with a 4.5 percent operating margin.
• Posted a pre-tax income of $122 million, resulting in a 0.9 percent pre-tax margin.
• Reported earnings per share (EPS) stood at $0.06.
• Operating cash flow reached $2.4 billion.
• Made $712 million in debt and finance lease payments.
• Closed the quarter with total debt and finance lease obligations of $19.4 billion.

First Quarter 2024 Adjusted Financial Highlights:

• Operating revenue came in at $12.6 billion, up 6 percent from the first quarter of 2023.
• Operating income stood at $640 million with a 5.1 percent margin.
• Pre-tax income was $380 million, with a pre-tax margin of 3.0 percent.
• EPS was reported at $0.45.
• Operating cash flow was $2.5 billion.
• Free cash flow amounted to $1.4 billion.
• The adjusted debt to EBITDAR ratio improved to 2.9x from 3.0x at the end of 2023.
• Return on invested capital reached 13.8 percent, marking a 2.8 point increase from the previous year on a trailing five-quarter average.

The resurgence in travel and tourism encompasses not just leisure excursions but also a spike in business and corporate travel. The World Travel & Tourism Council (WTTC), in collaboration with Oxford Economics, has forecasted a landmark year for the Travel & Tourism sector in 2024. The sector’s economic impact globally is expected to hit a record $11.1 trillion, supporting nearly 348 million jobs worldwide. This marks a growth of over 13.6 million jobs from its peak in 2019.

Spending by international visitors is projected to nearly match the 2019 high, reaching $1.89 trillion. Meanwhile, expenditure by domestic tourists is set to surpass all previous records, amounting to $5.4 trillion, reflecting the sector’s vast potential and the opportunities it holds.

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