Delta Air Lines has cut its 2026 profit and cash-flow forecasts as persistently high fuel prices weigh on earnings, although chief executive Ed Bastian said travellers were continuing to accept higher fares.
The US carrier now expects adjusted earnings per share of between $5.10 and $5.60 for the year, down from its July forecast of $6.50 to $7.50. Its guidance for the fourth quarter was also below analysts’ expectations.
Delta reduced its forecast for annual free cash flow to $2.5 billion, compared with an earlier estimate of as much as $4 billion.
Fuel costs have risen sharply this year, adding to the pressure on airline profits. Delta said the increase had added about $6 billion to its fuel bill, while jet fuel prices in the US Gulf of Mexico region had almost doubled from a year earlier to $4.34 on Thursday.
Mr Bastian said the airline had been able to pass on much of the increase through higher fares without discouraging customers. “The consumer response continues to be quite strong. We’re seeing it across all channels, all cabins of service, all geographies, business, leisure,” he said.
Delta expects fourth-quarter revenue to rise by 20% from the same period last year, an acceleration from the 16% increase recorded in the third quarter after adjusting for the contribution from its refinery in Pennsylvania.
The airline reported net income of $756 million for the three months to the end of September, down from $1.42 billion a year earlier. Adjusted earnings were $1.76 a share, while adjusted revenue rose 16% to $17.59 billion after excluding refinery sales, maintenance revenue and profit-sharing.
Operating revenue increased by 21% to $20.19 billion. Premium-cabin revenue rose 18% to $6.82 billion, outpacing the 12% increase in main-cabin sales to $6.8 billion.
Delta’s third-quarter adjusted earnings and revenue were below analysts’ forecasts of $1.75 a share and $17.67 billion respectively. It was the first time in two years that the airline had missed estimates.
Delta and Elon Musk dispute
Delta also plans to add Amazon’s Leo satellite internet service to its aircraft, amid an industry-wide push to improve in-flight connectivity.
Elon Musk criticised Mr Bastian on X after a travel blog reported that the Delta chief had told staff the airline did not want to work with Mr Musk. SpaceX’s Starlink service has agreements with several airlines, including United Airlines, American Airlines, Southwest Airlines and Alaska Airlines.
Mr Bastian dismissed the idea of a personal dispute, saying: “There’s no tit-for-tat as far as I’m concerned.” He added that Delta had held talks with SpaceX six years ago but that the company had not been ready to scale its service at the time.
