Delta Air Lines Takes Flight Amidst Choppy Skies
Delta Air Lines has reported a solid first quarter 2025 performance, despite facing challenging economic conditions. The airline posted pretax earnings of $382 million or $0.46 per share, with revenue rising 3.3% year-over-year to a new record for the March quarter. Operating margin was approximately 5%, and free cash flow stood at $1.3 billion.
Delta CEO Ed Bastian praised his team for delivering strong profitability and returns on invested capital, despite the uncertainty surrounding global trade and economic growth. "I'm proud of our team for delivering a solid profitability and strong returns that are expected to lead our industry," he said during the company's Q1 2025 conference call.
The airline has taken steps to mitigate the impact of softer demand in domestic Main Cabin travel, with plans to keep second-half capacity growth flat over last year. Delta will also manage its cost base more aggressively to reflect lower flying levels and deliver on its commitment of low single-digit growth in nonfuel unit costs.
Despite these challenges, Delta's diversified revenue streams, including Premium and Loyalty, have shown resilience in this uncertain environment. The company has positioned itself for another year of strong growth, but acknowledges that global economic uncertainty may impact the pace of growth.
"We are positioned for another year of strong growth," said Bastian, "but given broad economic uncertainty around global trade, growth has largely stalled." Delta's focus is now on taking action in areas it can control, protecting margins and free cash flow.
The airline's people-first culture has been recognized by Fortune Magazine as the #15 company on their list of the 100 best companies to work with. This culture will continue to be a key differentiator for Delta, helping to insulate its business and create durability in financial performance during uncertain times.
Looking ahead, Delta's June quarter outlook is for double-digit operating margins and pretax income of $1.5 billion to $2 billion on revenue that is essentially flat to last year. While the full-year outlook has not been updated at this time due to macro uncertainty, the company remains well-positioned to deliver solid profitability and meaningful cash flow in 2025.
