Delta Air Lines has today reported its 2025 financial results, and 2026 forecast, and there’s nothing too surprising. While the airline expected to achieve record profits in 2025, that didn’t turn out to be the case, due to all the economic uncertainty.
Delta is now expecting to earn record profits in 2026 — I understand Delta has to provide guidance, but it just seems that we’re continuing to see a lot of uncertainty, so who knows how things will play out. Anyway, in this post I’d like to focus on the detail of Delta’s 2025 results (particularly in Q4) that I found most interesting.
In this post:
Delta premium revenue jumps 9%, economy revenue drops 7%
Coming out of the pandemic, “premium” travel has been all the rage, and that’s a trend that’s continuing, seemingly with no end in sight. Just listen to any airline earnings call, and you’ll hear premium, premium, premium, premium, premium. Airlines are doing well in their forward cabins, while they’re struggling more in economy.
There’s no better reflection of this than Delta’s latest passenger revenue numbers. Before I share those details, let me just define a couple of things:
- Main cabin revenue includes standard economy bookings, including basic economy
- Premium product revenue includes first class, business class, premium economy, and extra legroom economy
With that in mind, if you compare Delta’s Q4 2025 results to Q4 2024 results:
- Main cabin revenue decreased by 7%, from $6.05 billion to $5.62 billion
- Premium cabin revenue increased by 9%, from $5.22 billion to $5.70 billion
As you can see, that means premium cabin revenue exceeded main cabin revenue, which is the first time in the company’s history that we’ve seen that. Looking at the full year, and comparing 2025 to 2024:
- Main cabin revenue decreased by 5%, from $24.50 billion to $23.39 billion
- Premium cabin revenue increased by 7%, from $20.60 billion to $22.10 billion
So for the full year, main cabin revenue exceeded premium revenue. However, it seems there’s no end in sight to this shift, and I wouldn’t be surprised if 2026 is the first full year where premium cabin revenue exceeds main cabin revenue.
Will aircraft LOPAs change more radically over time?
People disagree as to whether the move toward premium travel is a temporary fad, or a permanent shift. If you ask airline executives, they believe it’s the latter.
I suspect they’re largely correct, given the extent to which airline profits in the United States have also increasingly centered around loyalty programs, and premium cabins are a big part of that.
However, I don’t think it’s quite as much of a given as they assume, because I think it largely reflects the increasing dual economy we see in the United States — you have a lot of people struggling with the increased cost of living, while you have others getting rich off the strong stock market, which would make you believe that everyone is thriving. If we see a big drop in the stock market, you can say goodbye to the level of premium demand we’re seeing.
What I find most interesting, though, is how LOPAs are evolving (“LOPA” stands for “layout of passenger accommodations” — essentially how planes are configured). When you look at wide body, long haul aircraft, airlines are clearly going all-in on premium. I mean, just look at the seat map for United’s upcoming Boeing 787-9s (American and Delta are also making their wide body planes more premium, but not quite to this extent).
The planes will feature a total of 222 seats, and 138 of those seats will be premium. Around 80% of the cabin is dedicated to premium seating, so you better hope that premium revenue exceeds economy revenue!
But what I find interesting is that you don’t see nearly this level of transformation on domestic aircraft. The percentage of first class seats remains largely unchanged compared to 20 years ago, even as we’ve gone from seeing 10% of first class seats sold, to seeing 90% of first class seats sold.
For example, just look at Delta’s old Boeing 757-200s, compared to Delta’s new Airbus A321neos:
- Airbus A321neos have 194 seats, including 20 first class seats, 60 extra legroom economy seats, and 114 economy seats
- Boeing 757-200s have 199 seats, including 20 first class seats, 29 extra legroom economy seats, and 150 economy seats
So I guess if you want to look at it differently, you could largely attribute the increase in premium revenue on narrow body planes to more people simply buying up to extra legroom economy seating, given how many more of those seats there are, plus the new ways Delta has monetized those seats.
However, it still seems like US airlines don’t want to exceed that 20-seat first class cabin limit that largely exists on new generation aircraft. Several months back, Delta executives hinted that they were considering making first class cabins bigger, but nothing has come of that yet. I’ve written in the past about how I think US carriers should consider greatly expanding the size of their first class cabins, and I’m curious if that does eventually happen.
Bottom line
In Q4 2025, Delta reached an interesting milestone, where premium cabin revenue exceeded economy revenue for the first time. The trend is clear — premium travel demand keeps increasing, while economy travel demand (or at least the revenue associated with it) keeps decreasing.
Now, this might not be quite as radical as it sounds, as I imagine a large part of this is passengers increasingly paying for extra legroom economy seating, as those cabins continue to get bigger. However, I can’t help but think that we should also eventually see first class cabins get more than 20 seats.
What do you make of Delta’s premium cabin revenue milestone? Do you think we’ll eventually see bigger first class cabins?
i'm looking forward to when business class bookings collapse and they have to sell them at record prices to fill em up
while including extra legroom economy in premium revenue might be a stretch, the difference in fare between regular economy is not that high.
The chances are that the two amounts are now equal or pretty close to it if you count Comfort Plus in regular economy.
The point is that DL says people are willing to buy up from the basic coach experience and there is no doubt that AA and UA are seeing the...
while including extra legroom economy in premium revenue might be a stretch, the difference in fare between regular economy is not that high.
The chances are that the two amounts are now equal or pretty close to it if you count Comfort Plus in regular economy.
The point is that DL says people are willing to buy up from the basic coach experience and there is no doubt that AA and UA are seeing the same thing.
and DL's MAX 10s will have more Comfort + seats than the 737-900ERs so the extra length is largely going to more premium seats.
internationally, the difference between DL and both AA and UA is that it has been much harder to get an upgrade into Delta One than in AA or UA's business or first (AA int'l) products. Both are tightening up upgrades because they see the demand that exists and DL has captured for years.
THAT is what is driving the increase in premium revenue along w/ the addition of premium economy.
and any president that sinks the stock market will be ousted. It is perhaps a stronger 3rd rail of the US economy than Social Security
Tim is high again.
GUC is the easiest to get upgraded followed by PP and SWU is almost useless.
That being said, GUC is the least useful of them all. Especially if you need to buy an overpriced PE ticket.
"people are willing to buy up from the basic coach"
But the point is not people buying up.
They are buying "out" because airlines blackmail them with inhumane basic restrictions, buying out of...
Tim is high again.
GUC is the easiest to get upgraded followed by PP and SWU is almost useless.
That being said, GUC is the least useful of them all. Especially if you need to buy an overpriced PE ticket.
"people are willing to buy up from the basic coach"
But the point is not people buying up.
They are buying "out" because airlines blackmail them with inhumane basic restrictions, buying out of something that used to be free is now what you call "buy up". You're basically paying more for less.
first, DL does not do gate upgrades to int'l business while AA and UA have but are reducing it.
second, all airlines have reduced economy seating. and, yes, people are buying up regardless of their reason.
there are a few airlines that have 32 inch or greater in economy but not a whole lot.
So then Delta should be bold and try a bigger Comfort+ section and eliminate regular economy. American Airlines did that with MRTC More Room Throughout Coach but abandoned that.
A few observations:
1. The days of thinking the leisure traveler only cares about the cheapest fare available are coming to an end. Some with the income want a better experience
2. The days of free upgrades to those generally flying on OPP are becoming much more limited. Flying week and week out will never translate into abundant upgrades. At least domestically most companies/clients only pay for coach travel. And that's where you will...
A few observations:
1. The days of thinking the leisure traveler only cares about the cheapest fare available are coming to an end. Some with the income want a better experience
2. The days of free upgrades to those generally flying on OPP are becoming much more limited. Flying week and week out will never translate into abundant upgrades. At least domestically most companies/clients only pay for coach travel. And that's where you will be sitting unless you pay out of pocket.
3. If the demand exceeds of supply of premium seats you will see remodels towards more premium. Paid premium, not upgrades.
A couple of thoughts:
In terms of "permanency" of the move towards premium, I suspect it also all depends on the strength of ULCCs in the future. The bigger the ULCCs, the more competition for the economy class traveler.
In terms of making the first-class / extra legroom section bigger on aircraft, I see that as a very complicated, time-consuming process. Depending on the flight schedule of an aircraft, a bigger first-class / extra legroom...
A couple of thoughts:
In terms of "permanency" of the move towards premium, I suspect it also all depends on the strength of ULCCs in the future. The bigger the ULCCs, the more competition for the economy class traveler.
In terms of making the first-class / extra legroom section bigger on aircraft, I see that as a very complicated, time-consuming process. Depending on the flight schedule of an aircraft, a bigger first-class / extra legroom may work on one segment, but not the other. I suspect the bigger first-class / extra legroom will be limited to certain aircraft that can be scheduled to certain markets.
Wondering if first class cabins on narrowbody jets remains the same size due to the amount of galley space they have while galley space is more flexible on widebodies. With upgrades hardly ever clearing I know the seats are selling out on a lot of the domestic flights I take
Came here to say this. Doubt there's much space in a narrowbody forward galley left over after catering 20 seats for, e.g., a California to Midwest route that needs a full meal service, two drink services, three trash sweeps...24/28/32 seats might make it tough to provision a premium soft product.
You have to remember cargo as well. More premium passengers means less checked luggage, more room for cargo. I know this is the case for a few transatlantic routes.
Anyway I think this all makes sense since travel is really getting more expensive. For a family of 4 in Europe, you are dropping 15-30k for two weeks... just a bit more for eco plus or even J on sale.
"you could largely attribute the increase...to extra legroom economy seating"
Exactly. I'm more curious about the cabin metrics (and no, extra legroom isn't a separate cabin).
It's a bit odd to me that Comfort+ is classified as premium cabin.
It's still an economy seat in the economy cabin by all metrics, it feels a little dishonest, especially since they anyways give them away for free a lot of the time to status passengers unlike true D1/PS which aren't eligible for upgrades on international itineraries.
Weird way to word "Economy class underperforms for DL"
Very weird mindset to have.
Underperformed implies there's a bar that they are benchmarking against, this is just a relative comparison.
If premium cabin revenue was only $5B this time around, but economy revenue was the same, would you still say it underperformed?
Maybe, maybe not. A much better metric would be $/square foot, or $/square foot/hour, or something like that. You can't really tell who's overperforming just based on raw revenue.
"Will aircraft LOPAs change more radically over time?"
I thought about this before, but what if angled lie-flat seats became the new Premium Economy. Something like United's domestic 777s or business class of years past. But I figured that will probably cannibalize Business Class.
So probably the next best thing IMO would probably a deeper recline of Premium Economy, something like a La-Z-Boy.
In the mean time, plenty of carriers have increased their capacity such...
"Will aircraft LOPAs change more radically over time?"
I thought about this before, but what if angled lie-flat seats became the new Premium Economy. Something like United's domestic 777s or business class of years past. But I figured that will probably cannibalize Business Class.
So probably the next best thing IMO would probably a deeper recline of Premium Economy, something like a La-Z-Boy.
In the mean time, plenty of carriers have increased their capacity such as CX.
It could mean that J needs to become F for better product differentiation.
Originally, a lot of carriers were scared of PE cannibalizing J, but it seems to have not been the case. Rather than business class people booking down, you have economy class booking up. I could see the PE evolving to angle flat 2-4-2 or 2-3-2 if an efficient enough product can be created.
The reason why PE works today isn't because the...
It could mean that J needs to become F for better product differentiation.
Originally, a lot of carriers were scared of PE cannibalizing J, but it seems to have not been the case. Rather than business class people booking down, you have economy class booking up. I could see the PE evolving to angle flat 2-4-2 or 2-3-2 if an efficient enough product can be created.
The reason why PE works today isn't because the product is that amazing, it's because it uses only marginally more space than economy, usually a 30 to 40% increase, but yields much more proportionally, often as high as double of economy.
How lieflat J cannibalize F is already on the wall.
There is a big rumor going around that UA is planning to reconfigure their 737-700s with a 24 seater first class cabin. While it's just a rumor, word is its more likely to happen than not. As to why, I'm not quite sure.