Delta Air Lines (NYSE:DAL) executives said the carrier closed fiscal 2025 with record revenue, strong cash generation, and continued progress on balance sheet improvement, while outlining expectations for renewed demand momentum and earnings growth in fiscal 2026. Management also highlighted a leadership transition in the commercial organization and announced a new wide-body aircraft order aimed at supporting long-term international expansion and fleet renewal.
Fiscal 2025 results: record revenue and cash flow
Chief Executive Officer Ed Bastian told investors Delta delivered “a strong close” to its centennial year despite what he described as a challenging environment. The company reported full-year record revenue of $58.3 billion, an operating margin of 10%, pre-tax income of $5 billion, and earnings of $5.82 per share. Bastian emphasized free cash flow as a key highlight, with Delta generating $4.6 billion for the year, which he said was the highest in company history.
For the December quarter, executives reported record revenue of $14.6 billion. Janki said the quarter produced pre-tax profit of $1.3 billion, an operating margin of 10%, and earnings of $1.55 per share. He noted the government shutdown reduced pre-tax profit by $200 million, or $0.25 per share. Management also cited FAA-mandated flight reductions and weather disruption as factors that affected capacity and non-fuel unit costs during the quarter.
Commercial performance: premium strength and diversified revenue
President Glen Hauenstein said Delta’s strategy has helped diversify revenue into higher-margin sources, with diversified revenue streams representing 60% of total revenue in 2025. He reported that premium revenue grew 7% for the year, cargo revenue increased 9%, and maintenance, repair, and overhaul (MRO) revenue rose 25%. Total loyalty revenue improved 6%, while travel products continued to grow at double-digit rates.
Hauenstein also highlighted the performance of Delta’s co-brand relationship with American Express. He said American Express remuneration grew 11% to $8.2 billion, supported by a fourth consecutive year of more than 1 million new card acquisitions and double-digit year-over-year co-brand spend growth in every quarter. Looking ahead, Delta expects high single-digit growth in co-brand remuneration in 2026 and reiterated a longer-term goal of reaching $10 billion within the next few years.
During the analyst Q&A, management said premium demand remained strong, while the Main Cabin recovery has been slower. Hauenstein said Delta “has not really seen main cabin move yet,” adding that movement in Main Cabin would be a factor that could support results toward the higher end of guidance if it materializes in 2026.
Outlook: March quarter growth and fiscal 2026 targets
Executives said fiscal 2026 has started with strong booking momentum. Bastian said Delta set a new record for bookings “last week,” with cash sales up double digits on top of last year’s strength. Delta forecast March quarter revenue growth of 5% to 7% year over year, supported by what the company described as improving consumer and corporate demand and a healthier supply-demand environment as “unprofitable flying is rationalized.”
Janki guided to March quarter earnings of $0.50 to $0.90 per share and an operating margin of 4.5% to 6%, both expected to improve year over year. For the full year, Delta projected earnings of $6.50 to $7.50 per share, free cash flow of $3 billion to $4 billion, and leverage of two times by year-end.
Management cautioned that early-year booking strength is still limited in duration. In response to an analyst question about guidance sensitivity, executives said it was “the second week in January” and warned that the industry’s volatility in 2025 remains a reminder to remain cautious when projecting outcomes.
- Capacity: Hauenstein said Delta plans to grow capacity about 3% for the full year, with all new seat growth concentrated in premium cabins, driven by interior upgrades and new aircraft deliveries.
- Costs: Janki said non-fuel cost performance is expected to remain within Delta’s “low single digit” long-term framework, though first-quarter non-fuel CASM growth is expected to be modestly above the full-year average due to fleet preparation for peak summer.
- Capital spending: Delta plans $5.5 billion of capex in 2026, including about 50 aircraft deliveries and ongoing investment in customer experience and technology.
Fleet and strategy: Boeing 787 order and international expansion
Delta announced an order for 30 Boeing 787-10s with options for 30 more, with deliveries starting in 2031. Bastian said the aircraft would enhance the international network and extend long-haul capabilities. Janki said next-generation wide-body aircraft can deliver up to a “10 points margin advantage” over the aircraft they replace, with more premium seating, improved fuel efficiency, and expanded cargo capability.
In response to questions, Hauenstein said the 787-10 order supports both growth and replacement, particularly for the 767-400 fleet, and also adds diversification to Delta’s wide-body and engine mix. Executives also reiterated plans to expand internationally in 2026 and beyond, including growth in Asia and Middle East markets, while continuing to use joint ventures and a strong domestic foundation to support network expansion.
Leadership changes, operations, and reporting updates
Bastian said Hauenstein will retire next month, and Joe Esposito has been elevated to Chief Commercial Officer. Esposito told analysts Delta’s core strategies are not changing and that the airline plans to “dig even deeper” into integration across network, pricing, loyalty, products, and merchandising.
On operations, Bastian said Delta continues to lead on reliability metrics, citing Cirium recognition as the most on-time airline in North America and a number one Net Promoter Score among major airlines. However, he acknowledged the airline is working to improve recovery from irregular operations, pointing to post-COVID changes and pilot contract-related complexities as contributors to recovery challenges.
Delta also said it will change aspects of its financial reporting. Janki said the company will provide additional detail on its third-party MRO business, separating MRO from non-fuel unit cost metrics to preserve visibility into core airline cost trends. He described MRO as a “unique Delta capability” and said the company is optimistic about growing the business beyond the $1 billion revenue level over time, with potential to reach $2 billion and then $3 billion in revenue, while improving margins from high single digits toward the mid-teens.
On capital allocation, management reiterated that debt reduction remains the top priority, while noting opportunities to expand shareholder returns as leverage declines. Janki referenced dividend growth and said the company expects to utilize an existing share repurchase authorization over its timeframe, while remaining focused on paying down debt in the near term.
About Delta Air Lines (NYSE:DAL)
Delta Air Lines is a major U.S.-based global airline that provides scheduled passenger and cargo air transportation, aircraft maintenance and repair services, and related travel products. Its operations include mainline domestic and international passenger services, a branded regional network operating under the Delta Connection name, dedicated air cargo carriage, and in-house maintenance, repair and overhaul through Delta TechOps. Delta offers a range of cabin products for different customer segments, including premium business-class service on long-haul routes and tiered economy offerings on domestic and international flights, and it markets customer loyalty benefits through the SkyMiles frequent-flyer program.
The carrier operates a mixed fleet of narrow- and wide-body aircraft from multiple U.S.
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