Delta beat Q2 expectations with record revenue of $17.7B (+14% YoY) and EPS of $1.56, despite the highest fuel costs in its history. Management reaffirmed full-year guidance and expects double-digit operating margins in H2 2026, citing sustainable pricing power from the industry-wide fuel recapture strategy and structural capacity discipline. Cross-company signals include strength in the Amex and LATAM partnerships, continued aircraft delivery constraints from Boeing/Airbus, and rational supply behavior across the sector. Q2 revenue of $17.7B, up 14% YoY on ~1% capacity growth, with total unit revenue (TRASM) up 12.4%.
Delta beat Q2 expectations with record revenue of $17.7B (+14% YoY) and EPS of $1.56, despite the highest fuel costs in its history. Management reaffirmed full-year guidance and expects double-digit operating margins in H2 2026, citing sustainable pricing power from the industry-wide fuel recapture strategy and structural capacity discipline. Cross-company signals include strength in the Amex and LATAM partnerships, continued aircraft delivery constraints from Boeing/Airbus, and rational supply behavior across the sector. Q2 revenue of $17.7B, up 14% YoY on ~1% capacity growth, with total unit revenue (TRASM) up 12.4%.
Delta beat Q2 expectations with record revenue of $17.7B (+14% YoY) and EPS of $1.56, despite the highest fuel costs in its history. Management reaffirmed full-year guidance and expects double-digit operating margins in H2 2026, citing sustainable pricing power from the…
Q2 revenue of $17.7B, up 14% YoY on ~1% capacity growth, with total unit revenue (TRASM) up 12.4%.
EPS of $1.56, pre-tax profit $1.4B, operating margin 8.8% — all above initial guidance.
Q3 guide: revenue up mid-teens, operating margin 11-13%, EPS $2.00-$2.50.
Management discusses Delta Concierge, an AI-powered digital assistant now available to more than half of FlyDelta app users with full rollout later this month, and expects AI to enable significant efficiency and personalization improvements, viewing it as a large future opportunity.
Corporate sales growth driven by fares, not volume. Management expresses strong confidence in the durability of its premium strategy and industry pricing power, despite fuel headwinds, and reaffirms guidance with optimism about future growth.
Delta is investing in fleet renewal, including the upcoming MAX-10 deliveries and satellite Wi-Fi upgrades, with a focus on upgauging and international expansion. They expect capacity growth of 2-3% in Q4 and are growing MRO revenue, with investments aimed at fleet resilience and technology.
Management expresses strong confidence in the durability of its premium strategy and industry pricing power, despite fuel headwinds, and reaffirms guidance with optimism about future growth.
“Coming into the recent fuel spike, most US carriers were already struggling to earn their cost of capital... we believe current revenue momentum should remain sustainable even if fuel prices moderate. That is an important step towards impr…”
“We're not growing main cabin seats. This is a multi-year, several years in a row that we haven't grown this cabin. We won't be growing it next year either. But our premium revenue has been up 17%.”
“We're back up to now approximately 75% throughput of the product that goes through the refinery. but there still will be a tail of the outage into the third quarter. That's going to be a $0.05 to $0.07 hit on the third quarter. Net of that…”
“The cost of production, not just for fuel, is up. but the cost for labor is up, the cost for airports are up, the cost for technology is up, planes you can't get and if you can get them, their costs are higher.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 Q3 | $2.00–$2.50 | $2.25 | GUIDED |
| EPS | FY2026 | $6.50–$7.50 | $7.00 | MAINTAINED |
| Free cash flow | FY2026 | $3B–$4B | $3.5B | MAINTAINED |
| Op margin | FY2026 Q3 | 11%–13% | 12% | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | EPS | FY2026 Q2 | $1.00–$1.50 | $1.56 | Met / beat |
| FY2026 Q1 | Op margin | FY2026 Q2 | 6%–8% | 9.43% | Met / beat |
| FY2025 Q4 | EPS | FY2026 Q1 | $0.50–$0.90 | $0.64 | Met / beat |
| FY2025 Q4 | Op margin | FY2026 Q1 | 4.5%–6% | 3.16% | Missed |
| FY2025 Q4 | Revenue | FY2026 Q1 | $14.5B–$14.9B | $15.854B | Met / beat |
Delta points to its LATAM JV as a key driver of strength in South America, highlighting the benefit of the partnership's expanded connecting network.
“South America has been very strong. This year and for the past really 18 months and the forwards look really good based on our partnership with ATAM, aligning ourselves with their connecting bank structures in South America.”
Hi. Good morning, everyone. Joe, just a question on international. Just curious, we were sitting here in March. How much of your 2Q international was on the books versus 3Q? I just ask because international, and particularly Atlantic, may be a little bit below what we had thought. I feel like it could be something with the booking curve. So should we be expecting a better sequential improvement internationally because of that dynamic? And any thoughts you can provide on the international geographies would be helpful.
… point of sale has been a little bit softer, but we've transitioned to more of a U.S. point of sale. We're over 80% now for U.S. point of sale in the transatlantic, and that falls back to our strengths. The fares are higher, and the strength of our brand in the U.S. is much higher. So the transatlantic will have a great summer. The good thing about the transatlantic is it's smoothing out. The seasonality has been flattening, which is good for us, and people are moving their trips more into the shoulders and the traditional off-season. Pacific has kept up with capacity. We're actually growing the Pacific, so unit revenues were up about 8% on similar capacity. And you've seen us with two new markets this year, Hong Kong, and we're annualizing Melbourne and Los Angeles, Shanghai and Salt Lake City, Incheon. Asia and the Middle East will be the focus for the next couple of years. Latin is a little bit of two different stories. South America has been very strong. This year and for the past really 18 months and the forwards look really good based on our partnership with ATAM, aligning ourselves with their connecting bank structures in South America. Mexico had been a little bit weaker as the incidents, the violence this earlier this year. So Mexico had been a little bit softer as well as short haul. But we'll expect to see improvements in that as we get into the fourth quarter of this year. and our capacity also reflects that. We were down 7% in Latin America with mostly, most of that is in the short haul category. And we'll bring that capacity back based on demand. And it's not assured it comes back, it's slowly coming back, but we should see a strong winter for leisure travel. And again, South America has really been the bright spot. Just getting back to domestic, again, that had been the lead in unit revenue performance and really strong performance as you exited the quarter on unit revenue versus when you enter. And it's good for the participation of all the carriers that have come in on fuel recovery, the fastest in the domestic system and the fastest we've ever seen historically. So domestic is on a really good trajectory, especially with corporate sales traveling in the U.S. and a couple of bright spots that while we said 20% for corporate, Big cities like Los Angeles and Boston were actually closer to 30%. So really good progression in the domestic system.
Korean Air JV remains the backbone of Delta's Asia expansion, with access to 70-80 destinations supporting growth without additional capital spend.
“We've got a great anchor partner in Asia with Korean Air that allows us to expand ourselves through 70, 80 destinations through Asia. And now we have access from all of our hubs.”
Hey, good morning. Just to clarify with your kind of focus on international over the next few years, just taking a longer-term view, How do you see the kind of capacity growth in the domestic market versus opportunity in the national market? Just wanted to put a final point on that as you think longer term.
Yeah, I think longer term, you know, the domestic market is, you know, moves with the economy. International has an international for us will grow faster than average just because there's a lot of economies that we still don't serve and will grow faster than the domestic market. And so I kind of look at our domestic We think about becoming more efficient. A good part of capacity for the future in domestic will be efficiency, as Ed said about gauge growth and getting back to a positive gauge growth because we don't have a problem with demand. So larger airplanes make us more efficient and give you that extra capacity. I think there's going to be parts of the U.S. that we're focused on where it grows faster than average, where we can find premium markets like Raleigh-Durham and Austin and Los Angeles and places like that, that we can continue to enhance the ecosystem for domestic. So I see a lot of efficiency in domestic based on utilizing our current hub structure. International, most of it's going to be Asia and Middle East as we continue to add economies that we don't serve. And a lot of it is looking at our customers have a high demand to go to those destinations we don't fly to. and many others like Hong Kong that we just started or Melbourne or other places in South Pacific and Southeast Asia. And we've got a great anchor partner in Asia with Korean Air that allows us to expand ourselves through 70, 80 destinations through Asia. And now we have access from all of our hubs. So I think you'll see international grow faster than average. Domestic will be, the theme will be much more of efficiency.
Delta reaffirms that the Amex co-brand partnership is accelerating, with double-digit card spend and member growth — a strong signal for Amex's travel and entertainment segment.
“We're not just the largest contributor to the overall distribution of Amex product and cards as well as revenue spend. We're also their fastest growing and they are our number one partner in the world and we are theirs.”
Thanks for that. If I could sneak just one more in on the co-brand card acceleration that you noted. Can you talk about the drivers of that and is there any sort of geographic push behind that acceleration. Thanks for taking the questions.
I think one of the wonderful benefits of our relationship with American Express is we're two companies that are first exclusive with each other and two of the leading consumer brands in the country will have the exact same strategy, the exact same demographic in terms of who we're looking to reach, incredibly complementary. and building on each other's strengths. And that's why you see the compounded effect year after year after year. We're not just the largest contributor to the overall distribution of Amex product and cards as well as revenue spend. We're also their fastest growing and they are our number one partner in the world and we are theirs. And the value you create when you Thank you.
Delta expects its non-fuel unit cost (CASM-ex) to normalize toward low single-digit growth as capacity growth normalizes in Q4, but the offset is that capacity growth is being restrained partially by fleet and engine availability issues. — This points to ongoing durability of pricing power as supply is constrained by OEM delivery delays and engine durability issues.
All right, that's helpful. And then maybe just a quick follow-up. You know, you mentioned the MAX 10 being out there and MAX 7. It sounds like we're getting a little bit closer to the end of the tunnel. Do you think that the delivery of some of those aircraft that have been constrained can upset kind of what is a better structural environment, or does that not factor into your consideration?
Oh, it absolutely does add to the structural changes. The fuel that powered the low-cost evolution was being able to grow faster than your costs were, with all the aircraft availability from both Airbus and Boeing on the narrowbody side. That has dramatically changed. And by the way, it's not the question of whether Boeing and Airbus can even produce the aircraft as much as the engine producers. And the lack of durability that we've seen in the quality of the new engine technology isn't anywhere close to the pre-existing technologies that we had previously. So I think availability of aircraft is a fairly significant constraint as well. And for us, we're looking forward to getting the MAX 10. We expect to see that in Delta colors next year. which will be great to have, but it's also going to enable us to release some older narrowbodies, whether it's 717s and 757s, that will be a replacement.
Delta is cutting main cabin capacity while growing premium capacity, betting that the premium and loyalty segments will drive margin expansion; main cabin is down 2-3% in seats and growth will not return next year. — This capacity shift puts pressure on competitors to also focus on premium yield, potentially squeezing low-cost carriers and reshaping domestic competition.
Okay, great. And just maybe a quick follow-up on premium and main cabin trends. I guess first, could you just, you know, you've got some color on the seats, but could you just tell us what premium versus main cabin RASM growth was in 2Q? and then given, you know, the tougher comps and premium and the reduction in low-cost capacity over this year, are you anticipating main cabin RASM could outperform premium underlying your 3Q guide or, you know, obviously I know Delta's been cutting main cabin seats that maybe looks a little bit different than the rest of the industry. Any additional color there would be helpful. Thanks so much for the time.
Yeah, well actually in the second quarter our unit revenue in main cabin did exceed premium because we are down in capacity and, you know, the industry has removed significant amount of unprofitable capacity. If you look at the Ultra LCC category, that capacity is down about 30%. So main cabin has gotten significantly healthier this year. I mean, last year, it was one of our biggest objectives to improve the main cabin. And also, we're not growing main cabin seats. This is a multi-year, several years in a row that we haven't grown this cabin. We won't be growing it next year either. But our premium revenue has been up 17%. and unit revenues below main cabin, but our growth in that category has been up high single digits while revenue is outstripping the capacity in premium revenue. So I think we're getting into a really good balance between main cabin and our premium cabins.
The refinery outage is a short-term issue (5 cents hit in Q2, 5-7 cents in Q3), but Delta still expects a $0.05 benefit from the refinery in Q3 and a larger benefit in Q4, indicating the refinery remains a key hedge against high fuel costs. — Delta's refinery capability provides a unique, though imperfect, hedge for airlines, and its recovery will help margin expansion in Q3-Q4.
Carter, that is very helpful. And maybe it's a quick follow-up. Forgive me if I missed this, but what is the current status of the refinery after the outage? And if it's not fully back up yet, what does that mean?
Hey, Ravi. Yeah, the refinery had an outage about a couple weeks ago that was a five-cent hit to us in the second quarter. We're back up to now approximately 75% throughput of the product that goes through the refinery. but there still will be a tail of the outage into the third quarter. That's going to be a $0.05 to $0.07 hit on the third quarter. Net of that, we still expect the refinery to have a $0.05 benefit in the third quarter and that based on where the forwards are now, that benefit would increase into the fourth quarter. Very helpful. Thank you. Yep. Thanks.
Delta's industry fuel recapture strategy is 'sticky' — management believes the pricing power gained from the fuel spike will persist even if fuel prices moderate, suggesting a step-change in industry pricing behavior.