Delta Air Lines, Inc. Q1 FY2026 earnings call

Ed Bastian noted earnings were 40% higher than last year and consistent with January guidance. Strong demand across corporate and leisure. Delta's People First culture was recognized on Fortune 100 Best Companies to Work For list. Placed firm orders for 95 additional aircraft, expanded lounge network. Cerium named Delta most on-time airline in North America for fifth consecutive year, but working on improving reliability and recovery post-severe weather and pilot agreement changes.

Delta delivered record revenue growing nearly 10%, increasing more than $1 billion over last year. Diverse revenue streams represented 62% of total revenue in the quarter with premium and loyalty growing mid-teens. MRO revenue in the first quarter more than doubled over the prior year to $380 million, with full-year outlook of $1.2 billion.

Expect low teens revenue growth in June quarter, recapturing 40%-50% of fuel headwind, 6%-8% operating margin with pre-tax profit of $1 billion. While full-year outlook not updated, structural advantages keep them on track for long-term targets. Second quarter operating margin expected 6%-8% with EPS $1-$1.50.

Higher jet fuel prices, operational reliability not meeting standards consistently, contractual changes to pilot working agreement impacting recovery, geopolitical uncertainty affecting fuel prices and demand.

Q: About mid-teens revenue outlook and fee impacts.

A: Assumes oil prices stay high, more RASM growth anticipated.

Q: 2Q RASM and demand across entities.

A: Strong demand across all entities, Transatlantic peak summer looks good.

Q: View on 2026 earnings and fuel impact.

A: Fuel volatility makes guiding difficult, higher fuel likely leads to industry structural reform.

Q: Demand elasticity and geographies.

A: Strong demand overall, some hotspots like Europe and Mexico leisure.

Q: Premium cabin segmentation and jet fuel sourcing.

A: Full speed ahead on premium segmentation, no issues with jet fuel sourcing.

Q: Capacity reduction and fleet plan.

A: Targeting off-peak capacity, considering fleet retirement.

Q: Pacific ex-China yield and MRO revenue.

A: Pacific ex-China demand strong, MRO revenue due to strong backlog and heavy work scopes.

Q: Corporate recovery and basic economy.

A: Corporate volumes increase with flexible inventory, corporate share strong.

Q: Fuel recapture and pilot recovery.

A: Aim to recapture all fuel, working on pilot recovery issues.

Q: Demand durability and free cash flow.

A: Premium consumers immune to headlines, first quarter free cash flow on track.

Q: Corporate demand and fare acceptance.

A: Corporate demand strong, both momentum and higher fares contributing.

Q: International market share and fare changes.

A: Good market share gains, fair changes different for domestic and international.

Q: Brand loyalty and hiring.

A: Strong brand loyalty, no changes to hiring plans