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MarketWatch First Take: Delta kicked off airline earnings season with a bang. What does it mean for other carriers?


Delta Air Lines kicked off the airline sector’s earnings reporting season this week amid concerns about the impact of fuel prices and hiring challenges on the industry.

Nonetheless, Delta Air Lines Inc.’s

results marked a positive start to the earnings season, with the carrier reporting revenue significantly above the same period in 2019, before the pandemic hit. CEO Ed Bastian also pointed to a continuing travel recovery citing a shift in consumer spending to “experiences” and improving demand in corporate and international travel.

Delta’s revenue of $13.98 billion was up from $12.56 billion in 2019. Analysts surveyed by FactSet had projected revenue of $12.9 billion. For the fourth quarter, Delta expects revenue up 5% to 9% from 2019. FactSet consensus of $11.75 billion implied 0.3% growth. 

During the third quarter, Delta’s domestic passenger revenue was 2 percent higher and international passenger revenue was 97 percent recovered compared to the same period in 2019. Transatlantic revenue was up 12% compared to 2019, driven by leisure destinations such as Italy, Spain and Greece and improving business demand.

See Now: Delta stock jumps after 3Q revenue rises above 2019 levels

The numbers could bode well for the broader airline sector, according to Wolfe Research analyst Scott Group. “We see a more positive read to the other legacy airlines given the strength in transatlantic revenue,” he wrote, in a note released on Thursday.

United Airlines Holdings Inc.

reports its third-quarter results after market close on Oct. 18, with a conference call the next day. American Airlines Group Inc.

will report its third-quarter results on Oct. 20, while JetBlue Airways Corp.

reports its third-quarter numbers on Oct. 25.

“We expect revenue tailwinds observed at Delta to also be pronounced at United,” wrote Raymond James analyst Savanthi Syth, in a note released on Friday. “To a lesser extent, American and JetBlue should also benefit due to large corporate and Transatlantic exposure at the former and large coastal city exposure at the latter.”

Citing Delta’s results and American Airlines’ better-than-expected third-quarter revenue outlook, Vertical Research Partners Analyst Robert Stallard wrote on Friday that “the basic theme is that demand remains strong.”

See Now: Airline stocks rise on Delta’s strong 3Q revenue as carrier touts continuing travel recovery

A recent poll conducted by Morning Consult for Visa Inc.

found that 41% of U.S. adults are planning to travel this holiday season, up 13% from last year. Some 73% of respondents said they are likely to travel by car, with 37% traveling by air.

Of those planning to travel this holiday season, 90% plan to travel domestically, according to the research. The poll was conducted among a sample of 2,210 U.S. adults between Sept. 21 and 22, 2022.

Last month United Airlines raised its third-quarter revenue growth outlook, citing “strong” demand at the end of a “robust” summer.

Analysts surveyed by FactSet are looking for United Airlines earnings of $2.22 a share, or $2.28 a share excluding items, on net income of $752 million. Sales are expected to be $12.743 billion, analysts forecast.

See Now: Airlines enter earnings season wrestling with fuel prices, hiring challenges

American Airlines is forecast to report earnings of 48 cents a share, or 54 cents a share excluding items, on net income of $414 million, according to analysts surveyed by FactSet. Revenue is expected to be $13.380 billion.

Analysts are looking for JetBlue earnings of 22 cents a share, or 24 cents a share excluding items, on net income of $76 million, according to FactSet. Revenue is expected to be $2.557 billion.

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