Delta Air Lines is the world’s most profitable airline, and the airline very much sets the standard when it comes to financial performance in the industry. Delta has just become the first US airline to report its financial results for the second quarter of 2024, and the company’s stock is tumbling following this update.
In this post:
Delta disappoints investors with financial results
You can always tell how good an airline’s financial results are based on the first bullet point in the press release about the earnings results. For Delta’s Q2 2023 results, that was the following:
Delivered highest quarterly revenue and profitability in Delta’s history
A year later, for Delta’s Q2 2024 results, that’s the following:
Delivered industry-leading operational performance, underpinning trusted brand and customer loyalty
On the plus side, Delta had record revenue of $15.4 billion for the quarter, up 5.4% from last year. However, net income dropped nearly 30% from a year ago, to $1.31 billion. The weaker profitability was due to a combination of increased expenses (up to 10% from last year), plus increased capacity, putting downward pressure on fares.
Delta had strong performance when it came to revenue from premium ticket sales, up 10% from a year ago, while revenue from economy ticket sales rose just 0.3%. Meanwhile revenue from Delta’s Amex partnership was up 9%.
Delta CEO Ed Bastian stated that he thinks the airline is “fairly well insulated” from industry overcapacity, given how much revenue Delta gets from its premium seats, rather than economy seats. Delta’s stock is down around 10% in pre-market hours, following this news.
The industry isn’t headed in a good direction
Delta did as good of a job as an airline can do in the current environment with achieving results. I’m not in any way attempting to suggest that Delta is in trouble, or anything. But I think these results are worth taking note of, because they point to a bigger issue in the industry, which many airline executives try to ignore.
Look, the airline industry is an absolutely impossible business. It’s a highly cyclical industry that requires a ton of capital, has a unionized workforce without the ability to easily renegotiate contracts, and it has endless factors outside of a company’s control. Worst of all, during the best of times, the industry overall is only marginally profitable. There’s a ton of downside, but not a lot of upside.
Fortunately there are some incredibly passionate people who dedicate their lives to the industry. After all, while the airline industry might not be a great business, it is one that enables travel, which is something that so many people enjoy.
The thing is, when you listen to airline CEOs, they basically try to sell you on the dream that the only way the industry is headed is up. They love to talk about how airlines just don’t do a good job telling their stories, and how airline stocks are vastly undervalued, but that’s going to change soon.
I mean, we’ve heard airline CEOs make some pretty unbelievable claims. Perhaps most famous for that is former American CEO Doug Parker, who said that the airline would never lose money again, and that American’s stock at the time was so low that “it defies logic.”
When it comes to profitability, personally I think that several airlines may have peaked in 2023. That’s thanks to a combination of factors, including that global capacity hadn’t yet been restored. However, I can’t help but feel like it’s at least slightly downhill from here:
- Airlines are dealing with the reality of much higher costs than pre-pandemic, particularly with labor
- We’ve seen a huge amount of capacity restored within the past year, not just in the United States, but globally, and that puts downward pressure on fares
- If airlines think there’s overcapacity now, one has to wonder how they’d feel if Boeing weren’t having issues with certifying and delivering new jets, and if Airbus weren’t having issues with its Pratt & Whitney engines
The higher labor costs aren’t going anywhere, and personally I feel strongly that we’re going to continue to see downward pressure on fares. When you combine those factors, I don’t really buy into the Delta and United vision that we’re just going to keep seeing better and better margins. And all of this assumes that there isn’t any major economic downturn, which could have a much more catastrophic impact on the industry.
Bottom line
Delta is the first US airline to report its Q2 2024 financial results. While the airline had record revenue, profitability was down considerably. That’s not surprising, when you consider that the industry is dealing with higher labor costs and lower yields, due to increased capacity.
There’s no end in sight to higher labor costs and/or overcapacity, so I think the margins in the industry will continue to decrease over time. Airline executives often talk about overcapacity being a problem, while also expressing frustration with aircraft manufacturers not being able to reliably deliver planes on schedule. The capacity problem is only going to keep getting worse, in my opinion.
What do you make of Delta’s financial results? Am I the only one who thinks financial results will keep getting worse, rather than batter?
He is going to have a meltdown when UA reports Q2 results next week and outperforms DL on YoY RASM, becoming the new top dog in domestic!!
I do want to say that Tim Dunn is absolutely hilarious.
He never fails to make me laugh.
"Delta Air Lines is the world’s most profitable airline." It's nothing of the sort! DL's operating margin for April to June was 13.6% but Ryanair's (12 months to March 2024) was 18.1%.
surely, you can see how cherrypicked your own statement is by comparing a 3 month margin for Delta to a 12 month margin for Ryanair?
And, in case you missed it, Ryanair stock has fallen dramatically because their guidance was weakened dramatically last year.
Delta IS the most profitable US airline, the highest revenue airline in the world, and has the highest market cap of any publicly traded airline in the world.
And Emirates, who is in a literal desert, make more money than DAL/Delta Airlines too.
not hard to do when you pay your employees a fraction of what US airline employees make.
But you aren't the least bit interested in the pay of ANY US airline, now, are you?
Well Tim that's called a skill issue
If I make you laugh, you make me cry - that you fail to grasp that an airline that pays its people much less SHOULD make a whole lot more money.
It has nothing to do with skill.
It has everything to do with the fact that US airlines are staffed by US employees in the US.
The Middle East airlines including Emirates uses the cruise ship model of staffing that hires the CHEAPEST...
If I make you laugh, you make me cry - that you fail to grasp that an airline that pays its people much less SHOULD make a whole lot more money.
It has nothing to do with skill.
It has everything to do with the fact that US airlines are staffed by US employees in the US.
The Middle East airlines including Emirates uses the cruise ship model of staffing that hires the CHEAPEST employees from countries where many employees have to leave the country to find decent work.
Oh Tim Tim Tim
I don't want to make you relentlessly check this page every hour waiting for a response from me, but I will say this, again.
Those EK employees are hired globally, and their wages and conditions are publicly available on the Emirates website. The EK employees from Germany, America, Australia, etc are the same on wages and conditions as the ones from China, Nigeria, Malaysia.
EK won't be able to attract...
Oh Tim Tim Tim
I don't want to make you relentlessly check this page every hour waiting for a response from me, but I will say this, again.
Those EK employees are hired globally, and their wages and conditions are publicly available on the Emirates website. The EK employees from Germany, America, Australia, etc are the same on wages and conditions as the ones from China, Nigeria, Malaysia.
EK won't be able to attract any employees from Western nations with poor wages and conditions, and as I said those wages and conditions are quite good and available on the website.
You can also check their annual reports to see their labour costs. Their annual report has long been audited externally by PricewaterhouseCoopers, who Ed Bastian used to work for.
Multiple paragraphs, wow I'm becoming more like you every day. Is this a good time to disclose that I also own DAL/Delta stock? (Didn’t perform as well as my TSLA stock funnily enough)
all of that and easily verifiable facts show that EK spends far less per employee in total compensation not just compared to DL but compared to EVERY US airline.
The truth hurts and it is contained in those very same audited financial statements that you claim as the truth.
When you commit yourself to arguing against it, you look like the ultimate fool
Lol downward pressure on fares?
How much higher can you go?
I had to get back to my dentist in San Diego from Las Vegas
Delta 700 dollars in coach/main cabin one way
plus baggage and seat assignment costs
Problem solved book Southwest 149 bags fly free
Don't love them but Delta where my miles are near worthless devaluation after devaluation.Even United makes more sense from a pax perspective
Done!
Dim Tunn triggered. Nineteen posts so far.
you didn't bother to count the number of repeated posts from a small handful of AA and UA employees that can't stand to admit that Delta runs one of the best businesses in the global airline industry and also delivers one of the best products.
Did it ever dawn on you or a handful of other people that if you focused your ire on eliminating the voices of those very few people that feel like...
you didn't bother to count the number of repeated posts from a small handful of AA and UA employees that can't stand to admit that Delta runs one of the best businesses in the global airline industry and also delivers one of the best products.
Did it ever dawn on you or a handful of other people that if you focused your ire on eliminating the voices of those very few people that feel like it it is their civic duty to crAAp on anything accurate that is said about the airline industry and the players in it that this forum would be a whole lot more pleasant?
No, I am not triggered and I am also not going anywhere. As long as people make stupid statements, I will respond.
Why would they be UA/AA employees rather than just fans-
Oohhhhhhhhhhhhhhh. This is projection I see. You're a former Delta employee who got fired and has been trying to make it up for it ever since.
I really admire how well Delta does domestically while operating five different narrow body aircraft types, many of which are over 25 years old. American is operating just two narrow body types and it doesn’t seem to have given them any kind of cost or operational advantages. If Delta is able to reduce their narrow body fleet to just two or three aircraft types they will pull even further ahead of American and United.
Don
The most valid fleet comparison is between Delta and United. You are correct that AA hasn't gotten a real cost advantage from its relatively simple fleet but Delta does have a substantial fleet cost advantage over United.
The reason for DL's advantage is because of Delta Tech Ops which allows it to use its diverse fleet to sell maintenance services to other airlines.
Other airlines can't do that because their maintenance...
Don
The most valid fleet comparison is between Delta and United. You are correct that AA hasn't gotten a real cost advantage from its relatively simple fleet but Delta does have a substantial fleet cost advantage over United.
The reason for DL's advantage is because of Delta Tech Ops which allows it to use its diverse fleet to sell maintenance services to other airlines.
Other airlines can't do that because their maintenance is unionized and unions do not offer the flexibility to bring contract mechanics (largely retired Delta mechanics) back to work on a contract and then leave when the job is done.
and, as much as some people want to argue about the number of orders, Delta has consistently demonstrated it can get the planes it needs to grow where it is appropriate to do so - but they said today that they are moving forward with aircraft retirements because they are comfortable they can add aircraft as they need to - which means other airlines are not going to be able to grow much either.
As to Steven's comment below, it is clear that I am here to talk about the business of the airline industry and few people can or do accurately discuss it. Ben wrote a story, got it accurate, and after the usual interlopers drop off the scene - as they always do after a lot of friction - the conversation is carried by people that actually do contribute to the discussion - real customers and people that are impartial but understand the business.
Ben does tee up discussions on other airlines and I hope he does more of what he did today. So far, a handful of people love to show up and crap on discussions about Delta but maybe if Ben posts enough stories, enough of his real valuable readers - not the interlopers - will jump in with real commentary and observations and Ben's site will be a true well-rounded site for airline news of all kinds instead of the aversion that some have to discussing business issues - but which Ben is clearly capable of doing.
This is becoming so tiresome constantly have to read responses from that man about everything DL and all the back and forth arguing - DL seems to be the focus on here A LOT - I’m beginning to wonder why l
The heavier reliance on premium upsell from "bleisure" travel makes the carriers more vulnerable to consumer spending and Delta's numbers are reflecting. Theyre also the most exposed to that.
I'm seeing lower domestic discount first fares (the type people get upsold to) on all the carriers for bookings just weeks away still in the height of summer travel. Cross country in first for around $500 each way, some routes under $400. Didn't see those...
The heavier reliance on premium upsell from "bleisure" travel makes the carriers more vulnerable to consumer spending and Delta's numbers are reflecting. Theyre also the most exposed to that.
I'm seeing lower domestic discount first fares (the type people get upsold to) on all the carriers for bookings just weeks away still in the height of summer travel. Cross country in first for around $500 each way, some routes under $400. Didn't see those kinds of fares a couple months ago for relatively close in bookings. They were more $700 range.
Imagine if all the Boeing capacity had come online - a possible blessing in disguise for all the carriers
Greg
when a company serves 150 million plus customers per year, anecdotal experience means nothing for something that is easily quantifiable.
Delta specifically said that its premium tickets are seeing a double digit increase while coach is flat. United will likely report similar data.
The inability to increase fares is coming from coach which is why all of the industry analysts recognize that DL and UA are better off than the rest of the...
Greg
when a company serves 150 million plus customers per year, anecdotal experience means nothing for something that is easily quantifiable.
Delta specifically said that its premium tickets are seeing a double digit increase while coach is flat. United will likely report similar data.
The inability to increase fares is coming from coach which is why all of the industry analysts recognize that DL and UA are better off than the rest of the industry; Delta just simply has less cost increase and more revenue increase activity in the pipeline including from its loyalty program.
you are right that the manufacturer delays are helping slow the increase in capacity that the industry does not need right now
Richard Branson was asked how to become a millionaire & replied, "Start out a billionaire, and buy an airline".
Downwards pressure on fares...
Really? Not from where I have been searching. If there are downward pressure on fares, I wouldn't like to see what these sky high fares would be otherwise.
Timmy is a busy little bee in this comments section!
Convenient username I must say
Just retuned yesterday for 40K miles trip literally around N.A., Europe and Asia and on my way back to the US I flew KLM biz class which allowed me to use the D1 lounge and wow!
Not only impressed by the lounge itself but the soft service of the staff and attentiveness really is shocking!
Having just visited Jal First and Biz lounges in Haneda, I’m very pleased with what delta is doing here
Your experience validates why Delta leads US carriers in premium revenue growth and why their investment in premium services will only keep that revenue growth moving forward. The JFK D1 lounge was only open for a couple weeks of the quarter and 3 more D1 lounges are coming in the next year - with 2 in the next 6 months.
as much as some people love to tout how well foreign carrier service is, DL...
Your experience validates why Delta leads US carriers in premium revenue growth and why their investment in premium services will only keep that revenue growth moving forward. The JFK D1 lounge was only open for a couple weeks of the quarter and 3 more D1 lounges are coming in the next year - with 2 in the next 6 months.
as much as some people love to tout how well foreign carrier service is, DL is more than capable of and usually does deliver a high quality product.
There is a reason why they get a revenue premium and get more corporate travel revenue than any other US airline
Yes if the foreign carrier is LOT or Brussels or Saudia. Compared to Qatar/JAL/ANA/Singapore/Air France/other quality foreign carriers, not so much.
reread what he wrote
You simply can't stand to admit that DL's service compares favorably to "Jal First and Biz lounges in Haneda"
it is perfectly obvious why so many trash the comments section - because they can't stand to read let alone admit that Delta is running the best US airline and business and comparing very favorably with a lot more airlines than people like you want to admit.
"reread what he wrote"
Um, I did. And I still stand by what I said. In all cases I listed, they are all a more enjoyable experience in the air, and on the ground, at the same level or better. So overall, a much better experience than flying on Delta.
But keep sucking on that Delta penis for all of us lol
As long as we’re creating fake correlation and causations, let’s go ahead and remember the D1 lounge openings directly correspond to delta’s negative rasm in 2q and predicted negative revenue in 3q
seriously?
Do you really think a 2 week opening of a premium cabin international lounge in one city drives a difference in DL's RASM for a quarter?
retire, the user name, Julie.
You are clearly incapable of having a rational discussion and are here only to throw dirt on Delta and me because you can't stand to admit that Delta is running the best business and airline in the US and your first airline...
seriously?
Do you really think a 2 week opening of a premium cabin international lounge in one city drives a difference in DL's RASM for a quarter?
retire, the user name, Julie.
You are clearly incapable of having a rational discussion and are here only to throw dirt on Delta and me because you can't stand to admit that Delta is running the best business and airline in the US and your first airline love falls woefully short - which I am not afraid to say.
You're toast, girlfriend. Go play on Facebook
read before reply, tim
You make it too easy to make you look stupid
there is no mistaking what was originally said and what you said.
you CAN'T STAND to admit that Delta is running a world-class airline or that someone might talk about it.
You bet on the wrong horse. Have a mint julep or two and move on. Your are cutting your own life short with your negative emotions.
Irony is lost on Tim.
Tim - you said in a previous post today that “anecdotal experience means nothing…” but here you are saying that anecdotal experience validates your point. Which one is it buddy?
there are pages of real data that validates that what this person experienced is not anecdotal.
You do realize that JD Power recognized Delta as having the best first/premium service among US airlines with a score of 743 out of an industry average of 701. AA and UA both scored below average with AA the worst at 676. Only Air Canada was worse at stunningly low 629. Same trend for premium economy with UA well...
there are pages of real data that validates that what this person experienced is not anecdotal.
You do realize that JD Power recognized Delta as having the best first/premium service among US airlines with a score of 743 out of an industry average of 701. AA and UA both scored below average with AA the worst at 676. Only Air Canada was worse at stunningly low 629. Same trend for premium economy with UA well below average.
Even in economy/basic economy, where Southwest won, DL was at 651 with industry average of 613, AA at 611 and UA at 585.
It isn't a surprise that DL said on its earnings call that Delta One and domestic first class are their highest margin products and that their average fares are so much higher than other airlines.
DL also said that they expect to have a revenue premium in the Pacific - which is really big news given that the Pacific is where United has the biggest size advantage - and also where Delta has the greatest growth potential.
This guy's experience wasn't anecdotal but reinforces what the surveys actually say.
Some people - AA and UA employees - can't stand to admit that DL is truly running a world-class airline.
The comments section is a shitshow.
It usually is when Tim Dun shows up.
It takes two (or in this case, more) to tango. They're all equally cringe
you clearly missed that there were people that were mocking me before I ever joined the conversation and then when I did, there were people that were convinced I didn't know what I was talking about- which was no different from the articles yesterday and the day before and the day before that.
So, no, the evidence is clear that there are a handful of malcontents that can't stand that I speak about the industry...
you clearly missed that there were people that were mocking me before I ever joined the conversation and then when I did, there were people that were convinced I didn't know what I was talking about- which was no different from the articles yesterday and the day before and the day before that.
So, no, the evidence is clear that there are a handful of malcontents that can't stand that I speak about the industry and can understand what they don't.
And, as is often the case, there are a whole lot of real readers and customers of Ben that find the mocking very off-putting.
But you are free to live in your own world of scratched glasses.
None of which changes that the rest of the industry will be negatively impacted more than Delta... this is what the Wall Street Journal says
"Analysts expect Delta to fare better than rivals given its focus on lucrative international routes and premium seating."
Delta generates half of the US industry's profits and has taken on the cost increases that AA and UA will have to take on while getting the revenue that AA, WN and most of the low cost/ultra low cost segment will not generate.
With huge numbers of aircraft on order airlines like WN and UA can either dump capacity into the market and hurt their own financial results or they retire aircraft.
Given that UA's aircraft orders are 3X larger than any other US airline, UA will be taking on a whole lot of debt to grow very little capacity - a reality I said a year ago would be the case.
Ben got it right. Some can't stand to admit that Delta really is in the best position in an industry that had a pretty short season at the top of the earnings cycle post-covid.
Not Tim writing an 8 paragraph response as to why he's always right...
how extremely predictable.
Beyond extremely.
You are very obsessed with your $20k in DL stock
Negative RASM and positive CASM in 2Q and projected negative rasm in 3Q certainly doesn't look good for any airline and Delta certainly isn't alone in that outlook.
While DL, AA, and UA will likely be fine through all this, the negative rasm for the big carriers makes you want to short NK & B6 (to the extent it's even possible to short those two stocks anymore since they've fallen so low...).
Almost...
Negative RASM and positive CASM in 2Q and projected negative rasm in 3Q certainly doesn't look good for any airline and Delta certainly isn't alone in that outlook.
While DL, AA, and UA will likely be fine through all this, the negative rasm for the big carriers makes you want to short NK & B6 (to the extent it's even possible to short those two stocks anymore since they've fallen so low...).
Almost seems hard to believe where SAVE's stock was pre-pandemic and after the B6 merger offer.
It's amazing how much you can contribute to the discussion when you focus on the topic instead of a little here and there.
Yes, the low cost carriers are the most at risk.
But don't underestimate the impact to AA given that one of their execs just said a couple weeks ago that they probably have too much capacity in the market.
and AA and UA still have open FA contracts which will add hundreds...
It's amazing how much you can contribute to the discussion when you focus on the topic instead of a little here and there.
Yes, the low cost carriers are the most at risk.
But don't underestimate the impact to AA given that one of their execs just said a couple weeks ago that they probably have too much capacity in the market.
and AA and UA still have open FA contracts which will add hundreds of millions of dollars in costs and take cash to settle signing bonuses or retro.
thank you for focusing on the topic.
I have always believed that you can contribute if you would focus on the topic instead of other people.
Sorry. Is this Tim Dunn, ATL100Million, WorldTraveller, Jumbojet, Tom, 305, Erikoj, or someone else typing this?
It would be nice if you actually looked at the topic and spoke to it rather than turning everything into a passport plum festival.
you can't help yourself and that is why everyone sees the comment section as a perpetual sh..show
Ben got an article out that was accurate and reflected what DL reported long before DL's earnings CALL which confirmed what he and I said.
Others jumped in and worried about a letter here and there, and true to form, you joined the "you don't have a clue" narrative which you now continue even though I acknowledge that...
you can't help yourself and that is why everyone sees the comment section as a perpetual sh..show
Ben got an article out that was accurate and reflected what DL reported long before DL's earnings CALL which confirmed what he and I said.
Others jumped in and worried about a letter here and there, and true to form, you joined the "you don't have a clue" narrative which you now continue even though I acknowledge that you FINALLY accurately are dealing with the issue at hand.
DO you think you can help yourself, Max, and leave your caustic behavior in the drawer next to your bed and focus on the topic?
Delta's earnings are not good news for the airline industry but they also speak to the larger consumer spending issue which drives a large part of most western economies.
Given that government data said that prices are starting to ease and the ability to continue to stimulate the economy by spending is at risk.
Add in that DL is still the best run and best positioned to adapt to whatever is happening in the airline industry and the turbulence for other airlines will be much more severe.
THOSE are the real takeaways that matter - and for one nanosecond you proved you can focus on them.
Stay the course, Max. We're all cheering for you
9 paragraph response... and I can't help myself? Your self-awareness of how people see your comments is as low and illusory as ever.
work through your multiple personalities before responding to me. I don't need or want your commentary since I'm well aware how ill-informed it is. I'm not the one fired by delta or banned by multiple websites.
Enjoy your day.
you truly can't help yourself, can you?
For one small moment in time, you decided to quit worrying about a single vowel and posted a coherent response only to return to your usual slam against anyone that understands the industry and interacts with a real customer that sees Delta's quality as world-beating.
Go play with the little kids, Max.
This is all way over your head.
Ben wrote a valid story, I accurately commented and...
you truly can't help yourself, can you?
For one small moment in time, you decided to quit worrying about a single vowel and posted a coherent response only to return to your usual slam against anyone that understands the industry and interacts with a real customer that sees Delta's quality as world-beating.
Go play with the little kids, Max.
This is all way over your head.
Ben wrote a valid story, I accurately commented and extrapolated, and you can't stand that he or I accurately note the facts and implications.
The only thing about you that is Max is your anti-social behavior
:)
Enjoy your day, WorldTraveller
…And reaching the final loyalty cliff isn’t here yet, when all the rollover metrics finally sunset. I predict once that occurs and Delta’s foolish ‘strategy’ of treating loyal elites poorly becomes evident, revenue will drop as well. Because those former elites will finally be able to divorce from the abusive relationship.
and yet Delta not only leads the industry in loyalty program and credit card growth but DL's moves with its loyalty program are being copied by other airlines.
Surely you have paid attention to any number of articles that Ben has written of late about less attractive awards?
Yes, Delta is leading the devaluation of award currency.
The money the people of the USA gives to NASA is 25 billion dollars, yearly.
The USA would be better of partially privatizing certain parts of US carriers (more subsidies) from that 25 billion dollars.
US carriers are all private. Not sure how NASA's budget could help unless you're saying we should nationalize one of our carriers.
"Am I the only one who thinks financial results will keep getting worse, rather than batter?"
I think you mean to say better, although I do love me some cookie dough batter.
Ben's statement is correct and in line with what Wall Street fears not just for Delta, which is the best-run airline and certainly one of it not the best in the world, but for every other US airline.
The problem w/ discussing financial and strategic issues is that they go over the heads of most people.
Ben may not correlate all of the service issues to finances but he read this news exactly right...
Ben's statement is correct and in line with what Wall Street fears not just for Delta, which is the best-run airline and certainly one of it not the best in the world, but for every other US airline.
The problem w/ discussing financial and strategic issues is that they go over the heads of most people.
Ben may not correlate all of the service issues to finances but he read this news exactly right which means that what Delta said has implications for the rest of the industry.
“ The problem w/ discussing financial and strategic issues is that they go over the heads of most people.”
Just as it appears this comment went over your head in a sad attempt of yours to insult others you betrayed your own inability to read.
Reading comprehension, tim. It isn’t tough ;)
This is so crazy, all I did was point out a typo, somehow it resulted in this.
except what Ben wrote is not a typo. Delta's revenue growth was weaker than analysts expected and Delta's commentary and outlook is that the industry is likely settling into a period of weaker earnings even for the carriers that focus on premium revenue and get earnings from other sources besides air transportation - which is what Delta does better than any other US airline.
There are people that want to argue and denigrate me when...
except what Ben wrote is not a typo. Delta's revenue growth was weaker than analysts expected and Delta's commentary and outlook is that the industry is likely settling into a period of weaker earnings even for the carriers that focus on premium revenue and get earnings from other sources besides air transportation - which is what Delta does better than any other US airline.
There are people that want to argue and denigrate me when I understand not just what is going on in the industry but also commend Ben for getting the situation and getting an article out.
Again, Tim. Read. You're not even close to commenting on topic.
Max.
you have proven that you are hellbent on doing all you can to denigrate me.
I understand not only the comment but also the article Ben wrote and the larger issue of airline finances.
If a "a" vs. an "e" is all yolo or you have to talk about, it simply proves that the topic at hand really does go WAY over your heads.
It's not denigrating you when it's pointing out that your attempt to denigrate others "The problem w/ discussing financial and strategic issues is that they go over the heads of most people." when you can't even read what you're replying to and then double down in the same comment section once again COMPLETELY ignoring what your replying to.
Perhaps turn off your autobot reply mechanism and read what people write before replying.
And...
It's not denigrating you when it's pointing out that your attempt to denigrate others "The problem w/ discussing financial and strategic issues is that they go over the heads of most people." when you can't even read what you're replying to and then double down in the same comment section once again COMPLETELY ignoring what your replying to.
Perhaps turn off your autobot reply mechanism and read what people write before replying.
And trust me, this topic does not go over my head whatsoever. It's why I'm well aware of the amount of BS you bring to your comments and your very limited understanding of what you love to type.
What an unhinged and visceral response.
Tim must be very unwell.
It is incredible how much effort Max put into telling me that I couldn't read only for me to tell him that a single vowel doesn't change the story - which is what you focused on - so he went and posted a business-focused summary of the article and then grew unhinged once again.
Anyone that remotely looks at this site with objectivity can see what happens.
None of which changes that the implications for...
It is incredible how much effort Max put into telling me that I couldn't read only for me to tell him that a single vowel doesn't change the story - which is what you focused on - so he went and posted a business-focused summary of the article and then grew unhinged once again.
Anyone that remotely looks at this site with objectivity can see what happens.
None of which changes that the implications for the rest of the industry are much more significant than they were for DL - but that is the part the other airline employees here don't want to talk about so they trash the messenger.
and you've now written 11 paragraphs responding to a comment you didn't read, doubled, then tripled down on your inability to read. So yes, when you go off on one of your predictable rants about Delta when it is completely off topic, you can expect to be made fun of since you're already a laughing stock due to your Chatbot writing style and unwarranted arrogance.
Next time, a simple "oops. You're right. i didn't...
and you've now written 11 paragraphs responding to a comment you didn't read, doubled, then tripled down on your inability to read. So yes, when you go off on one of your predictable rants about Delta when it is completely off topic, you can expect to be made fun of since you're already a laughing stock due to your Chatbot writing style and unwarranted arrogance.
Next time, a simple "oops. You're right. i didn't read the comment I responded to" will be sufficient. You'd save yourself a lot of embarrassment.
In the future, if you avoid trying to denigrate others with statements like this
" The problem w/ discussing financial and strategic issues is that they go over the heads of most people.”,
you should probably make sure you know what you're responding to because you just look incredibly foolish otherwise.
The irony is this entire conversation has gone over your head.
some of us are smart enough to be able to understand the difference between an A and an E and discuss the real issue which Ben discussed - but not you.
Because you don't want ot admit that AA and UA and multiple other airlines will fare worse than DL when it all shakes out.
Wheel of Fortune is more your speed, Max. Leave discussions about the airline industry to those of us that know what to focus on
lol
Seems you don’t understand the difference since you’re the one that replied many times without realizing what the comment was
Your mom called. Dinner is ready
Put the drinks down, tim
You look stupid
of course it's true that many of us had our suspicions, but it's still deeply unfortunate to see it all out in the open like this. just really, very sad.
Tim's autism?
now that the market is open, DAL is down slightly more than AAL and UAL, all of which are down in the 5-9% range.
All US airlines are down based on Delta's ability to provide insight to the state of the industry.
Delta was one of several companies that reported financials today. Pepsico and food producer Conagra both had weak revenue. What DAL saw is in line with other consumer companies.
And,...
now that the market is open, DAL is down slightly more than AAL and UAL, all of which are down in the 5-9% range.
All US airlines are down based on Delta's ability to provide insight to the state of the industry.
Delta was one of several companies that reported financials today. Pepsico and food producer Conagra both had weak revenue. What DAL saw is in line with other consumer companies.
And, as has been seen for a few years, Delta and other airlines that are generating revenue via premium cabins and also via non-transportation sources are doing better than low cost carriers that have consistently been more impacted by high inflation.
And again, from a cost standpoint, airlines like American and United that have large open labor contracts will see a higher rate of cost growth as they have to eventually raise flight attendant salaries which will include some sort of retro or signing bonus that will compensate for the multiple salary raises that DL FAs have received and the retro that WN received as part of their new contract.
Airlines that envision high growth such as WN and UA will find it very hard to grow revenues given the weaker revenue environment esp. for leisure products.
The airline industry is reaching a plateau, Delta is at the top of the industry and faces less risk in the developing environment than other airlines.
"If this country was run by vegetarian women instead of flesh-eating men, this whole space disaster would never have happened. You know right now we're working to raise the consciousness of the vegetarian minority with diet sensitivity training so that people will be able to deal with the.... " Meanwhile the sign language interpreter in the background is making a "shake weight" type motion....
What about Dominos? I mean since you're going to regurgitate Alphastreet might as well list all three companies noted on the bottom of the DL report as related articles.
I’m not sure what’s more annoying, Tim’s actual ignorant comments or all his fake aliases trying to tell others how insightful he is.
You see comments as ignorant because you either 1. do not understand the airline industry or 2. don't want to admit the realities which others can see.
Ben is reading exactly what Wall Street sees.
And, as much as some don't want to discuss finances, the airline industry is for-profit and what Delta is seeing has significant implications for the "core" stories that people expect to read on a points/miles/travel blog
thank you for proving my point, tim.
Don't you DARE insult my daddy!
You knew he and his sock puppets would show up and dominate the discussion, seeing as it is an article about Delta...remember, Delta is the greatest airline in the history of aviation!
Delta's airfares are absurd. Well above the rate of inflation. Business travel still hasn't recovered. I don't know anyone in sales or business development who is flying transcontinental just to service a client. Before the pandemic, I knew people who could use that as an excuse to fly to San Francisco for dinner. I also wonder whether Delta's elites have taken their business elsewhere. It probably took a quarter or two for that to show up.
And yet our planes are completely full, which means that customers are willingly paying a premium. None of us pilots know where this “excess” of seats are. Nearly every flight is oversold or depart with very few open seats. Yes some of those are taken up by nonrevs but in general the load factors I’ve personally seen are all well north of 98%.
I find (the real) Tim Dunn's comments extremely insightful and useful. So much so that I would read his blog if he had (or has) one.
You probably believe everything Alex Jones says.
And a Scientologist.
@Eskimo-the proper term is Inuit, not "Eskimo."
No wonder you believe everything Tim has to say.
You can't even tell the difference between a pseudonym and an endonym.
And just like Tim's fluff, you forgot Yupik.
The guy doesn’t actually have a blog, he just comments on other dude’s blogs. That’s his entire life.
Increased costs from.......you guessed it. Labor.
Lmao, don't let these airlines fool you, they're doing just fine with airfares. People pay more to fly Delta, especially in premium cabins. They're turning these 100% full flights around so quickly, to fly to another destination as soon as they drop off a plane load of people.
Sometimes it is actually helpful to look beyond just the big headline. GAAP net income was down 29% from last year but was down 11% when adjusted for the refinery, unrealized gains/losses on investments, and losses on extinguishment of debt (in other words, non-operating items). Operating income was down 9% on both a GAAP and adjusted basis, which shows that a lot of the noise is coming from non-operating items.
Tim does obsess a lot over Delta but he does make very insightful and useful comments unlike some other readers here.
I think Ben hit it on the head. If Delta is not performing to the degree investors anticipated, it’s safe to assume this is an industry dynamic. Considering, Delta is perceived as the benchmark for financial performance, this latest report probably is far better than what the competition will report, even if it didn’t meet Wall Street’s expectations.
Totally agree with "305". These Tim Dunn comments are no longer entertaining and childish.
Another comment for all the fake Tim Dunns to please go away. The jokes are lame, and your obsession over a commenter is way weirder than his obsession with Delta.
I hope Eskimo and the other fake Tim Dunns at some point buzz off and stop wasting everyone’s time. They know absolutely zilch about the industry
@Erikoj
100% agree.
Since you mentioned, I'll address you.
The thing with Tim is he has passed the point where facts and opinions are different. No point in trying to convince Trump on climate change.
So let's just stop correcting and enjoy the fluff. HBO is way more fun than NatGeo.
Sadly, the worst thing, most people who believes him actually 'know absolutely zilch about the industry'.
So even Trump if saying 2% facts and 98%...
Since you mentioned, I'll address you.
The thing with Tim is he has passed the point where facts and opinions are different. No point in trying to convince Trump on climate change.
So let's just stop correcting and enjoy the fluff. HBO is way more fun than NatGeo.
Sadly, the worst thing, most people who believes him actually 'know absolutely zilch about the industry'.
So even Trump if saying 2% facts and 98% fluff, Tim, I mean Trump can turn the fluff into 100% facts.
And that's how he got (re)elected.
You guys obsessing over Tim Dunn is honestly a lot more annoying than his comments. At least he adds something to the conversation from his perspective even if it’s a perspective I don’t agree with. Enough with the spam
A lot of those accounts seem to be just one person with too much time on his/her hands, because they make the exact same syntax/grammatical errors.
as usual, Ben is more capable of reading and interpreting what is written than most of his readers.
Yes, Delta's financials rattled investors because costs are high - driven by labor and fuel - and fares are softening.
Delta is almost always the first airline to report and also one of the first Fortune 500 companies to report so analysts extrapolate out what Delta says not just to other airlines but across the broader economy....
as usual, Ben is more capable of reading and interpreting what is written than most of his readers.
Yes, Delta's financials rattled investors because costs are high - driven by labor and fuel - and fares are softening.
Delta is almost always the first airline to report and also one of the first Fortune 500 companies to report so analysts extrapolate out what Delta says not just to other airlines but across the broader economy. That is why most airline stocks are also down in pre-market trading and airline stocks will likely be down.
Keep in mind that Delta receives the highest average fares in the industry and is still adding capacity in the 3rd quarter faster than any other US airline in absolute numbers so Delta can discount in order to fill seats. Other airlines such as WN and UA that will try to grow at faster RATES will have an even harder time filling seats esp. after the summer.
And Delta is getting a 6 cent/gallon benefit from the refinery which means that it is saving $60 million just this quarter compared to what other airlines can get on fuel.
Delta has no open labor contracts or retro payments to make so airlines that have just recently signed labor contracts or have to do so and pay retro or signing bonuses will see even higher increases in labor costs.
International performed well as did domestic including Latin America and the Pacific, areas where Delta is committed to growing.
The fare environment is softening while costs - largely set by Delta - are not going down, as Ben notes.
Delta is in the driver's seat of an industry where competitors will not produce any better results.
Thoughts and prayers.
The Tim jokes are beyond old. I for one appreciate his perspective even if I don’t always agree with it - still one of the most insightful people in the comments
If you know anything about the industry whatsoever, you’d know tim actually is one of the least insightful and has no idea what he’s talking about
@Julie This "user" is clearly just a Tim Dunn alt
It's fun watching him over on CrankyFlier where there are some serious shut-downs....
Oh no! What will Tim do .
The biggest costs for airlines are the planes, fuel and people. With sky high fares and similarly sky high demand (3m+ passengers last Sunday), it basically tells me that Delta is being poorly managed, as none of those other costs are particularly out of whack. This should be a golden time for any airline, not least of which is Delta given their premium class performance
You hit the nail on the head. Fuel is not at an all time high, but planes are full and fares are not low. Delta commands a premium, especially in premium cabins. That just leaves labor as the culprit. Current and future culprit of decreased profits.
Which is why Delta has been trying to cut labor costs. Sky Clubs moving to kiosks. They're moving toward electronic boarding gates. More and more kiosks to check-in and tag your own bags. Go to Northern Europe, where airlines have had to live with high labor costs for much longer. You will hardly interact with a human at airports in Oslo or Stockholm. Everything is a kiosk. Even the security checkpoint, except for the X-ray machine.
I've been part of the automation task force at a major airline. And you're right - we will in the US get to that point. We just need to get a few people like TSA to come along kicking and screaming with their belief that a $15/hr contract employee does a better job verifying someone's ID to check a bag by eyeballing it briefly than a machine using biometrics. Which having dealt with TSA professionally...
I've been part of the automation task force at a major airline. And you're right - we will in the US get to that point. We just need to get a few people like TSA to come along kicking and screaming with their belief that a $15/hr contract employee does a better job verifying someone's ID to check a bag by eyeballing it briefly than a machine using biometrics. Which having dealt with TSA professionally for many years, it's fascinating and sometimes entertaining to see the disparate paths its branches take... one is obsessed with checking my drivers license against some laminated chart to make sure it's real while the other is innovating completely self-serve security screening. I've always thought the European model of some backscatter scanners monitored by law enforcement with automatic weapons slung on their shoulders did pretty good.
But the issue too is that with airport automation (and to an extent with reservations self-service and IVRs) you reach a finite point. Those savings are usually a pretty well estimated quantity. The labor groups like pilots, flight attendants and such are where costs can rocket up and never go down.
Except you ignore costs are sky high too. Labor, planes, fuel, and taxes/fees are tough in the airline industry where margins have traditionally been in the low single digits. The only place I can fault Delta leadership was being excessively generous with the pilot contract and being slow with the Delta One Lounges (Polaris and Flagship lounges have been around awhile now).
Real ones know that revenue is actually more important than profits. Explanation incoming.
You can have all the revenue you want, but if expenses are out of control, your ship will eventually sink in a ton of debt and join the list of defunct airlines on wikipedia.
Think B6 which realized it needed to get its house in order. Even if it got Spirit, it needed to get its expenses in order to gain from the acquisition or squander a very expensive opportunity.
Truly, I think...
You can have all the revenue you want, but if expenses are out of control, your ship will eventually sink in a ton of debt and join the list of defunct airlines on wikipedia.
Think B6 which realized it needed to get its house in order. Even if it got Spirit, it needed to get its expenses in order to gain from the acquisition or squander a very expensive opportunity.
Truly, I think it benefited more from the North East Alliance than from a possible acquisition. The alliance kept existing jets full with extra revenue. That's leverage in the right direction!!
I'm an accountant. Your statement is literally retarded. It's called cost-benefut ratio. You must consider credits AND debits. No profits = no available cash. I could go on but suffice it to say you are clueless about business finances.
@Timo,
'You must consider credits AND debits. No profits = no available cash.'
Spoken like a bookkeeper rather than an accountant.
It's quite possible on a GAAP basis to have zero 'profit' (net income) and a sea of cash in, for example, a company with large non-cash expenses such as depreciation expense, amortization of intangibles, and deferred items such as taxes.
Best if bookkeepers keep to keeping the books and leave the discussion of accounting...
@Timo,
'You must consider credits AND debits. No profits = no available cash.'
Spoken like a bookkeeper rather than an accountant.
It's quite possible on a GAAP basis to have zero 'profit' (net income) and a sea of cash in, for example, a company with large non-cash expenses such as depreciation expense, amortization of intangibles, and deferred items such as taxes.
Best if bookkeepers keep to keeping the books and leave the discussion of accounting theory to the accountants.
It’s bedtime in Australia so all I can say is please look after him today, the poor dear. Then again, perhaps he’ll be just fine; I’m sure he can tell us why this is good news because Delta.
Tim can make an alien invasion a positive for Delta.
He'll be just fine.
This is fake news. Delta is always and forever the most profitable airline.
I invested all of my life savings into Delta cos "Delta is love, Delta is life"
(/s)