Delta Air Lines (NYSE:DAL) is aiming for a rebound in the second quarter, forecasting pre-tax income between $1.5 billion and $2 billion, along with double-digit operating margins even as signs of a tougher economic backdrop weigh on domestic demand.
In its Q1 earnings call, CEO Ed Bastian reported pre-tax earnings of $382 million, or $0.46 per share, with revenue reaching $13 billion a 3.3% year-over-year increase and a record for the March quarter. Free cash flow came in at $1.3 billion, while operating margin stood at 5%.
Still, the airline noted challenges on the home front, particularly in Main Cabin and corporate bookings. International travel and high-margin areas like Premium and Loyalty remained strong, helping offset softer U.S. performance.
To protect margins, Delta plans to hold capacity flat in the second half of 2025 and trim domestic Main Cabin seat availability to match demand. Nonfuel unit costs rose 2.6% in Q1 but came in better than expected, according to CFO Dan Janki.
Delta also repaid $530 million in debt, with gross leverage now at 2.6 times. Management said international bookings especially for summer are looking solid, and spending from American Express partnerships rose 13% to $2 billion.
While analysts voiced concern about domestic weakness bleeding into international and premium markets, Delta leadership remained confident. They emphasized cost discipline and flexibility, acknowledging the uncertainty but standing by their strategy.
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