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Delta Air Lines is on track to reach cruising altitude, even after pilot contract negotiations and calculated capacity restoration efforts, as the travel industry recovers post-pandemic.
Airline holiday travel quarter results include:
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Adjusted net income: $828 million vs. $758 million expected (according to consensus estimates compiled by Bloomberg)
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Adjusted earnings per share: $1.28 vs. $1.16 expected
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Revenue: $13.7 billion vs. $13.5 billion expected
“We are coming off the busiest holiday travel period in our history, the 15-day period between Christmas and New Year’s,” Delta CEO Ed Bastian told Yahoo Finance.
He later added: “We also ended the year at a record high, which is 20% higher than pre-pandemic levels and a significant number compared to just three years ago. Masu. ”
The company hit an all-time high in cash sales on January 9th, which contributed to company management’s highly optimistic outlook for the current quarter.
View from the flight deck
Delta Air Lines is the first airline to release fourth-quarter financials and 2024 guidance this earnings season, ending the year with its stock outperforming its largest U.S. Steelbird competitor.
This forecast features traces of travel trends that are establishing a new normal in booking trends and business expenses.
“I’m hoping for between $6 and $7 a share this year…You know, my bias is that I want to get closer to $7 if possible,” Bastian said. “Y+That’s what we’ve been saying and what we’ve been saying.” [since] Our three-year plan is to get back on the streets in 2021. ”
“In recent years, there have been some delays in the supply chain. Maintenance costs have also increased,” he said, adding, “Performance during the period has been weak, and salaries and inflation are lower than expected a few years ago.” “It’s also much higher,” he said.
All Steelbird operators will face the challenge of demonstrating sustained profit margin growth to investors, which historically causes stock price turmoil.
During the quarter, Delta Air Lines posted adjusted operating margin growth of 9.7%, slower than the 11.6% reported for the same period in 2024.
Economic perspective from the industry that created the soft landing
According to the Consumer Price Index released by the U.S. Department of Labor, airfare prices fell 9.4% in December compared to the same month last year. This decline occurs as consumers become more price-oriented, while at the same time continuing to value experiences over products.
Bastian, the CEO who has monitored Delta’s customer booking trends, said he believes today’s travelers using the airline’s Sky service are “in a good place,” but he is unsure about consumer health. acknowledges that there may be different views.
“We live in the experience economy and are a premium provider of services to customers in that market. Our consumers are very financially sound. [They] They continue to hold on to the enormous wealth they have accumulated, not just in cash, but in overall household assets,” Bastian said.
Further outlook on the health of the experience economy’s consumers will be provided when United Airlines reports its earnings on January 23rd and American Airlines reports its quarterly results on January 25th.
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