Second-quarter revenue to be highest in its history, predicts Delta

ATLANTA, Georgia: This week, Delta Air Lines said that due to rising demand for spring and summer travel and the "most constructive backdrop" for the airline industry, it is forecasting the highest second-quarter revenue in its history.

After reporting better-than-expected earnings in the first quarter, the carrier forecasts a strong profit in the current quarter.

CEO Ed Bastian said that Delta's core consumers are in a healthy position and that travel remains a top priority for them, highlighting an acceleration in corporate travel spending and airlines' efforts to protect their pricing power in key markets.

The International Air Transport Association (IATA) said some 4.7 billion people will travel in 2024, compared with 4.5 billion in 2019.

Trade group Airlines for America (A4A) said passenger traffic in the U.S. could reach an all-time high this year.

A4A added that consumers are cutting spending on goods in favor of experiences after the COVID-19 pandemic, and hybrid work arrangements are also enabling Americans to travel more, leading to a surge in spending on air travel.

Demand is robust for premium travel, benefiting carriers such as Delta.

"Generational shifts and evolving consumer preferences are driving secular growth in premium experiences," Bastian said.

After its domestic unit revenue turned positive in the March quarter, with an improvement of seven percentage points from the previous quarter, Delta also reported an improvement in the U.S. market.

Christopher Raite, senior analyst at Third Bridge, said, "Despite all of the aircraft issues in the industry, demand is still healthy, and Delta's guidance is reflecting that."