Third-quarter revenues take off at Delta

Delta Air Lines posted record revenues on Thursday, as the recovery in domestic and international air travel continued.

Third-quarter adjusted operating revenues came in at $12.84bn, the US carrier said, up 3% on the same quarter a year earlier. Diluted earnings per share fell 35% to $1.51, including a 3 cent impact from Hurricane.

Most analysts had expected EPS of around $1.53, but shares in Delta put on 4% in pre-market trading, after the airline said it expected demand to remain robust in the fourth quarter, despite the softening economic outlook.

It reiterated its outlook for the final three months, including total revenues growing by between 5% and 9% and EPS of between $1.00 and $1.25.

Ed Bastian, chief executive, said: "Delta delivered a strong September quarter with record quarterly revenues. The travel recovery continues, as consumer spend shifts to experiences and demand improves in corporate and international.

"With strong demand and a return to best in class operational performance, we are ahead of our plan for the year on profitability, and expect to be free cash flow positive. We’re working towards full network restoration by summer of 2023, which supports a meaningful step up in profitability."

Along with the rest of the sector, US airlines were hit hard by the pandemic. But demand has taken off this year, as borders reopen, restrictions ease and corporate travel resumes. The strong US dollar is also encouraging more international tourism.

However, concerns remain that high interest rates - which are rising as central banks try to tackle surging inflation - could slow economic growth and weigh on demand.

However, Bastian told Reuters that even if the US economy does tip into recession, "we don’t think that just one busy summer of travelling is going to quench the desire and the needs of consumers. This demand surge…is going to continue for some time".