Delta expects higher profits thanks to high-end travel and ‘resilient economy’

Delta Air Lines on Wednesday said sales would grow in 2025, citing a “resilient economy” for strong travel demand and credit card spending, especially for higher-end offerings. It also said it expects to grow earnings in the coming years. Delta forecast revenue growth in the mid-single-digit percentage points next year compared with 2024, in line with the roughly 6% growth analysts were expecting. Delta said in a release that costs would continue to rise, up in the low single digits next year, excluding fuel. In an investor day presentation, the carrier said it would expand flying by 3% to 4% next year from 2024. Delta also reiterated its fourth-quarter outlook. Longer term, it said it expects to grow adjusted earnings by 10% a year over the next three to five years. Delta is the most profitable U.S. airline, and its leaders tout its strong partnership with American Express and high demand for pricier seats toward the front of aircraft as driving its success. It expects $7b in renumeration from AmEx this year and has a long-term target of $10b. The carrier has focused heavily on high-spending travelers, and in an investor day presentation said it has an advantage because of sharp wealth growth in high-earning households since 2019. It also said millennials and Gen Z are the fastest-growing consumer segments. Its upbeat tone on consumer spending has differed from the picture some other companies are painting. Target on Wednesday cut its profit forecast. Its COO blamed a “deceleration in discretionary demand” and higher costs. Delta rival United Airlines has made inroads in growing profit and capturing high-end travelers. Delta’s shares are up 60% so far this year through Tuesday’s close, while United’s are up 128%. Both are outpacing the broader market and other carriers.<br/>