Delta Air Lines recovers from summer setbacks in Paris

Delta Air Lines faced significant challenges during the summer of 2024, primarily due to a technology breakdown and a notable decrease in traffic to Paris, its leading European destination. The impact of these events was felt acutely during the Olympics, where unit revenue to and from Paris dropped by nearly 20%. Despite these setbacks, Delta's earnings per share for the year are projected to be between $5 and $7, excluding a 45-cent impact from the technology issues. Looking ahead, Delta's outlook for travel demand in Europe remains optimistic, with expectations of record-high demand continuing into 2025. The airline's leadership noted that younger travelers are eager to explore Europe independently, while retiring baby boomers, who possess disposable income, are also contributing to this demand. This demographic shift is expected to sustain Delta's growth in the European market. In response to the challenges faced, Delta is adapting its services to cater to affluent consumers, offering premium products and dedicated security lines for select passengers. The airline's competitive edge in the market is underscored by its historical revenue premium over the industry, although this premium saw a slight decline in August. Overall, while Delta navigated a tough summer, the airline is positioning itself for a robust recovery and growth in the European travel sector, driven by changing consumer demographics and a strong demand forecast.