Delta Air Lines, Inc.

Delta reported June-quarter revenue of $17.7 billion, up 14% year over year, with pretax profit of $1.4 billion, EPS of $1.56, and an operating margin of 9% (Erik Snell cited 8.8%). Total unit revenue grew 12.4% on about 1% capacity growth. Total fuel expense was $4.4 billion, up nearly $2 billion from last year, and fuel price per gallon averaged $3.93 including a $0.11 refinery benefit net of a $0.05 temporary outage impact. Nonfuel unit costs rose 6.8% year over year. Through the first half, Delta generated $4.0 billion of operating cash flow and $1.4 billion of free cash flow after $2.6 billion of reinvestment; adjusted net debt ended at $13.6 billion, and gross leverage is expected to reach 2x by year-end. For Q3, Delta expects revenue to grow mid-teens, operating margin to be 11% to 13%, EPS to be $2.20 to $2.50, and all-in fuel price to be about $3.50 per gallon including a $0.05 refinery benefit. Full-year guidance was reaffirmed at EPS of $6.50 to $7.50 and free cash flow of $3 billion to $4 billion.

Edward Bastian framed the quarter as evidence that Delta’s brand and industry position are stronger than ever, pointing to record revenue, strong returns on invested capital, and a durable premium strategy. He repeatedly argued that structural changes in the airline industry — higher fuel, labor, airport, and aircraft costs, plus limited aircraft availability — are making the old low-cost model less effective. His tone was confident and upbeat, with a strong emphasis on Delta’s diversified revenue model, premium experience, technology investments, and long-term path to mid-teens margins.

Erik Snell focused on profitability in a high-fuel environment, highlighting $1.4 billion of pretax profit despite what he called the highest fuel costs in Delta’s history. He detailed fuel expense of $4.4 billion, an average fuel price of $3.93 per gallon, and said the refinery was back to about 75% throughput after an outage that created a $0.05 hit in Q2 and is expected to create a $0.05 to $0.07 hit in Q3, net of a still-positive refinery benefit. He also pointed to $4.0 billion of operating cash flow, $1.4 billion of free cash flow in the first half, adjusted net debt of $13.6 billion, and a target of 2x gross leverage by year-end as part of continued deleveraging and shareholder return capacity.

Analysts pressed on unit revenue progression, whether pricing strength can hold as fuel moderates, the decline of low-cost carriers, cost inflation into 2027, international booking curves, cargo strength, and the new cabin-segmentation strategy. Management answered that the exit rate in TRASM was significantly higher than the entry rate, giving confidence in Q3 and the back half, and said the industry has little choice but to hold pricing given elevated cost inflation. On international, Joe Esposito said long-haul bookings are naturally more front-loaded and should improve sequentially into the fall, while Edward Bastian argued the broader U.S. travel environment and Delta’s network should support inbound demand and a strong mix.