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DELTA AIR LINES, INC. (DAL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 in line with April outlook: adjusted operating revenue $15.51B (+1% YoY) and adjusted operating margin 13.2%; adjusted EPS $2.10, with resilient premium, loyalty and MRO offsetting main cabin softness .
  • Beat vs S&P Global consensus: adjusted EPS $2.10 vs $2.04* and GAAP operating revenue $16.65B vs $16.16B*; Street likely re-focuses on margin durability and capacity discipline (see Estimates Context) (values from S&P Global).
  • Guidance restored but lower than January: Q3 EPS $1.25–$1.75, operating margin 9–11%; FY25 EPS $5.25–$6.25 and FCF $3–$4B; dividend raised 25% to $0.1875 starting September quarter .
  • Catalysts: visible capacity rationalization across industry; improving unit revenue trends into back half; premium/loyalty resilience; cost execution with non-fuel CASM up 2.7% YoY and expected to be flat-to-down in Q3 .

What Went Well and What Went Wrong

What Went Well

  • Premium and diversified revenues remained resilient: premium +5% YoY; loyalty +8%; Amex remuneration $2.0B (+10% YoY); MRO +29% YoY; international revenue +2% with record Pacific (+11%) and solid Transatlantic (+2%) .
  • Cost execution: non-fuel CASM 13.49¢ (+2.7% YoY) with Q3 non-fuel unit costs expected flat to down YoY; adjusted fuel price $2.26/gal (-14% YoY) .
  • Management tone on capacity discipline and free cash flow: “We are restoring financial guidance… EPS of $5.25 to $6.25 and free cash flow of $3 to $4 billion” and “25 percent increase to our quarterly dividend,” reflecting confidence in cash generation .

What Went Wrong

  • Unit revenue pressure: adjusted TRASM down 3% YoY; main cabin softness, particularly off-peak; domestic demand weaker vs international .
  • Margin compression vs last year: adjusted operating margin 13.2% vs 14.7% in Q2 2024 amid unit revenue pressure and higher non-fuel costs .
  • FY25 outlook reset lower vs January: prior Jan guide was >$7.35 EPS and >$4B FCF; after April’s non-reaffirmation, DAL restored FY guide at $5.25–$6.25 and $3–$4B FCF (still solid, but below January bar) .

Financial Results

Headline (Adjusted) – trend across recent quarters

MetricQ4 2024Q1 2025Q2 2025
Operating Revenue (Adjusted) ($B)$14.44 $12.98 $15.51
Operating Margin (Adjusted)12.0% 4.6% 13.2%
Diluted EPS (Adjusted)$1.85 $0.46 $2.10

Headline (GAAP) – Q2 2025 vs prior year

MetricQ2 2024Q2 2025
Operating Revenue ($B)$16.66 $16.65
Operating Margin12.6% 12.6%
Diluted EPS (GAAP)$2.01 $3.27

Vs S&P Global Consensus (Q2 2025)

MetricConsensusActualSurprise
Adjusted EPS$2.04*$2.10 +$0.06*
Operating Revenue (GAAP) ($B)$16.16*$16.65 +$0.49*

Values with asterisk (*) are from S&P Global.

Segment Revenue and Mix – Q2 2025

SegmentRevenue ($M)YoY ChangeUnit Revenue YoYNotes
Domestic$9,318 -1% -5% Capacity +4%
Atlantic$2,872 +2% -2% Capacity +4%
Latin America$954 -1% 0% Capacity -1%
Pacific$723 +11% -1% Capacity +11%
Passenger Total$13,867 0% -4% TRASM
Cargo$212 +7% n/a
Other$2,569 -2% n/a
Total Operating Revenue$16,648 0% -4% TRASM Third-party refinery sales -$1,141M

KPIs and Operating Metrics – Q2 2025

KPIQ2 2025YoY
TRASM (Adjusted, ¢)19.97 -3%
CASM (¢)18.73 -3%
CASM-Ex (Non-fuel, ¢)13.49 +2.7%
Avg Fuel Price/gal (Adj)$2.26 -14%
Fuel Expense (Adj, $B)$2.51 -11%
Load Factor86% -1.8 pts
Amex Remuneration$2.0B +10%
Premium Revenue Growth+5% —
Loyalty Revenue Growth+8% —
MRO Revenue Growth+29% —

Non-GAAP to GAAP reconciling items included MTM gains on investments ($735M) and hedge MTM/settlements ($54M), which explain the difference between GAAP EPS ($3.27) and adjusted EPS ($2.10) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPSFY 2025>$7.35 (Jan 10, 2025) ; then “not reaffirmed” (Apr 9) $5.25–$6.25 Lowered vs Jan; restored vs April
Free Cash FlowFY 2025>$4B (Jan 10, 2025) $3–$4B Lowered
Gross Leverage (Adj Debt/EBITDAR)FY 20252x or less (Jan) <2.5x Less stringent
Total Revenue YoYQ3 2025n/a0%–4% New
Operating MarginQ3 2025n/a9%–11% New
EPSQ3 2025n/a$1.25–$1.75 New
Quarterly DividendFrom Sep Qtr$0.15/share (Apr 24) $0.1875/share (Jun 19) Raised 25%

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
Premium vs Main CabinPremium outpacing main cabin; diversified revenue 57% FY24 Premium/loyalty resilient; main cabin softer; bias to load factor to mitigate curve shift Premium strength persists; segmentation expanding; main cabin soft off-peak Premium resilience; main cabin stabilizing with capacity actions
Capacity & Supply DisciplineStrong ops; planned growth into 2025 Cut 2H capacity to flat YoY; remove off-peak/main cabin Industry taking out seats; DAL reducing post-summer off-peak More rational supply supports RASM recovery
International TrendsTransatlantic UR strength; Pacific up International > domestic; strong long-haul bookings Record Pacific; transatlantic softer in peak, better shoulder Shoulder/seasonality shift; int’l margins more durable
Loyalty/AmexNearly $2B in Q4; strong growth $2.0B in Q1 (+13% YoY) $2.0B in Q2 (+10% YoY) Durable co-brand growth
AI/Tech & ProductOps excellence; product investments Pricing/yield mgmt tweaks; ops tech emphasis Testing AI pricing (Fetcher) from ~3% to ~20% of domestic by YE; Delta Concierge app later this year Accelerating commercialization of AI tools
Tariffs/Trade Policy—Will defer deliveries subject to tariffs; won’t pay tariffs Not planning to pay tariffs; cites policy progress Monitoring, manageable stance
Cost & CASM-ExNon-fuel CASM +3.3% in Q4 Non-fuel CASM +2.6%; maintain LSD growth Non-fuel CASM +2.7%; Q3 flat-to-down; cost levers active Improving trajectory into H2

Management Commentary

  • “In the June quarter, Delta delivered record revenue on a 13 percent operating margin… generating $1.8 billion in pre-tax profit…” — Ed Bastian, CEO .
  • “We expect the September quarter… EPS of $1.25 to $1.75 with a 9 to 11 percent operating margin… restoring financial guidance with EPS of $5.25 to $6.25 and free cash flow of $3 to $4 billion.” — Ed Bastian .
  • “Non-fuel unit cost growth of 2.7 percent was similar to the March quarter… We expect the September quarter will be our best non-fuel unit cost performance of the year.” — Dan Janki, CFO .
  • “Premium revenue grew 5 percent… loyalty revenue up 8 percent… Amex remuneration was $2 billion, up 10 percent.” — Glen Hauenstein, President .
  • “We’re about 3% [of domestic] with Fetcher today; goal ~20% by year-end… results are encouraging.” — Glen Hauenstein .

Q&A Highlights

  • Supply rationalization: Industry removing significant off-peak capacity into September; DAL reducing off-peak/main cabin to improve yields and recapture .
  • Premium segmentation: Continued expansion; no signs of premium demand weakening; more choice and higher mix over time .
  • Corporate demand: Stable to modestly improving; strongest in banking/consultancies/tech; autos/manufacturing lag .
  • Free cash flow bridge: $2B 1H; H2 tailwinds from investment pacing, booking curve normalization ($400–$500M impact in 1H), and working capital release; cash taxes lower given depreciation acceleration .
  • Aircraft/tariffs: Plan not to pay tariffs on aircraft; dialogue ongoing; deliveries/retirements net +~10 aircraft (~1% of fleet) in 2025 .

Estimates Context

MetricQ2 2025 ConsensusQ2 2025 Actual# of Estimates
Adjusted EPS$2.044*$2.10 18*
Operating Revenue ($B)$16.158*$16.648 5*
  • FY 2025 EPS consensus $6.02* vs DAL guidance $5.25–$6.25 — Street likely drifts toward range midpoints; Q3 EPS guide $1.25–$1.75 may drive near-term revisions (values from S&P Global).

Values with asterisk (*) are from S&P Global.

Key Takeaways for Investors

  • Mix resilience: Premium/loyalty/MRO continue to offset main cabin softness; supports margin durability even as TRASM remains under pressure .
  • Capacity discipline is a tailwind: Industry and DAL are cutting off-peak seats; management expects unit revenue trends to improve through H2 .
  • FY guide restored (lower than January), but credible: EPS $5.25–$6.25 and FCF $3–$4B, with Q3 non-fuel CASM flat-to-down; dividend raised 25% .
  • Non-GAAP adjustments matter: $735M MTM gain on investments boosted GAAP EPS; use adjusted EPS ($2.10) for comparability to consensus .
  • Trading setup: Near-term focus on H2 unit revenue inflection and Q3 cost delivery; upside catalysts include premium segmentation, AI pricing scale-up, and continued supply rationalization .
  • Medium-term thesis: Durable cash generation (FCF within long-term target), deleveraging, and shareholder returns, with structural advantages in premium/loyalty and international partnerships .

Additional detail and reconciliations are available in Delta’s Q2 2025 8-K press release and earnings call transcript -.