Delta Airlines Faces Profit Pressure as Fares Drop

Delta Air Lines announced on Thursday that it anticipates record revenue for the third quarter, driven by strong summer travel demand. However, the airline's projections fell short of analysts' expectations, as increased competition led to fare discounts after a surge in flight availability. Delta expects sales growth of no more than 4%, below the 5.8% forecasted by analysts, and adjusted earnings per share are projected between $1.70 and $2, falling short of the $2.05 estimate. As the most profitable airline in the U.S., Delta's report highlights challenges faced by competitors in the oversupplied domestic air travel market. United Airlines, which is set to release its results next week, is striving to match Delta's profitability, with both airlines focusing on expanding their premium seating options to enhance revenue. Analysts have shown a preference for Delta and United over other U.S. carriers, particularly as American Airlines and Southwest Airlines have recently downgraded their revenue forecasts. For the quarter ending June 30, Delta reported adjusted revenue of $15.4 billion, a 5.4% increase from the previous year, but slightly below Wall Street's expectations. The airline's earnings of $1.53 billion, or $2.36 per share, aligned with analyst predictions. Delta's CEO, Ed Bastian, noted that reduced industry capacity in the U.S. towards the end of summer should better align with demand, with the airline planning a 5% to 6% increase in flying capacity for the third quarter.