Delta raises revenue guidance as CEO says travel demand has been great
Delta Airlines And American Airlines Both raised revenue expectations for the first quarter on Tuesday, even as airlines have struggled with high jet fuel prices since the start of the war in Iran.
Delta CEO Ed Bastian told CNBC’s Phil LeBeau that Delta has taken a $400 million hit so far in the fourth quarter, but that demand has been “really huge,” leading to higher revenue growth than the airline had initially targeted.
“Not only does higher revenue offset the cost of fuel, but we’ve also had a pretty tough winter season in terms of storms,” he said. “So if you put it all together, we expect to get into the original guidance of 50 to 90 cents EPS.”
Delta had previously forecast an increase in sales of up to 7% in the first three months of 2026 and adjusted earnings of 50 cents per share to 90 cents per share for the first quarter.
American said in a securities filing that it now expects total revenue to rise more than 10%, compared to previous expectations of 7% to 10%.
Shares of Delta and American were up about 5% in premarket trading.
Jet fuel is airlines’ second largest cost, accounting for a fifth or more of expenses depending on the carrier. United Airlines CEO Scott Kirby told CNBC in early March that higher airfares could be on the way as airlines absorb rising fuel costs.
In its 8-K report filed Tuesday morning, Delta said it raised revenue guidance due to momentum in demand, citing power in the main cabin, premiums, loyalty and more. The airline also said its domestic and international unit revenues grew in the mid-single digits year over year.
Delta has the strongest balance sheet in the company’s history, he added.
Most of Delta’s revenue comes from corporate customers as well as high-spending customers who still want to travel, Bastian said.
“We saw eight of the 10 best sales days in our history this quarter, and we saw five of them in the last two weeks, the last week of March,” he said. “Even as the war continued, our revenues and bookings increased 25% year over year.”
Last quarter’s bookings were a softer comparison, as the airline struggled with customers abandoning schedule concerns.
