Driven by solid travel demand and higher expenditure on premium goods, Delta Air Lines (DAL, Financial) reported Wednesday that it expects revenue growth in the mid-single digits for 2025, in line with analysts' projections of roughly 6%. Over the following three to five years, the airline also projects adjusted annual earnings growth of 10%.
Delta reiterated its Q4 projection and stated during its investor day presentation that flying capacity would increase by 3% to 4% in 2025 instead of 2024. Delta praises its profitability for its cooperation with American Express and great demand for higher-end seating.
From 40% in 2010, premium tickets and loyalty programs now account for 57% of Delta's income; just 43% come from main cabin revenues. Over the years, the airline has changed its approach to raising paid first-class tickets. Unlike just 12% of paid bookings 15 years ago, today, more than 70% of first-class seats are bought.
Delta shares have climbed 60% year-to-date, following United Airlines (UAL), which has gained 128%, given its emphasis on high-end travelers. Both carriers are exceeding other airlines and the general market.
