US carrier Delta made record operating revenues in its 2023 June quarter, according to its latest financial results published on 13 July. 

Adjusted results showed a 19% year-on-year (YoY) jump in operating revenue to $14.6bn, with a pre-tax income of $2.2bn and earnings per share of $2.68. 

The successful quarter has promoted an updated full-year 2023 forecast of a 20% increase in YoY revenues. 

Its operating income from the second quarter (Q2) of this year increased by 64% compared to the same period in 2022. 

Ed Bastian, Delta CEO commented: “With this performance, we generated record revenue and profitability in the June quarter. Our people are the best professionals in the industry and I’m proud to recognise their achievements with $667m in H1 (first half) towards next year’s profit-sharing payment.”

The carrier pointed to “robust” domestic demand in the US and “record profitability” on international flight sales. International revenues and passenger numbers grew 61% YoY, although the low starting point in 2022 must be taken into account. Transatlantic journeys were popular for US passengers and transpacific continued to witness the benefits of Japan’s borders reopening. 

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“Latin America strength continued, driven by demand for travel to South America and the Caribbean with the integration of the LATAM joint venture progressing well,” the company said in its statement. 

Both revenue passenger miles and available seat miles increased by nearly 20%, reflecting the increased profitability from increased passenger demand. 

Nick Wyatt, GlobalData’s head of research and analysis for travel and tourism, described the company’s quarter as “robust.”

“Delta has delivered an extremely robust set of results as demand for travel remains red hot. This demand has helped drive higher prices at a time when fuel costs are reducing. These factors have contributed to a strong bottom line,” he said.

“The high demand for travel that is driving all of this shows no sign of abating, even in the face of economic headwinds. It is therefore difficult not to share Ed Bastian’s optimism that the trends we have seen this year will continue.”

Accelerating debt repayment

Delta said fuel costs fell quicker than expected in H1 2023, with fuel and related tax costs dropping -22% in Q2 2023 compared to Q2 2022. However, staffing and associated costs increased by 25% and overtook fuel costs on Delta’s outgoing sheet. 

But the overall positive outlook from Q2 allowed free cash flow reinvestment into Delta and accelerated debt repayments. 

Delta’s CFO Dan Janki explained: “Delta delivered $2.9bn of free cash flow in the first half of the year, while consistently reinvesting in the business.

“With an outlook for $3bn of free cash flow in 2023, we are accelerating debt repayment with a goal of retiring over $4bn in debt this year. We are on track to reduce leverage to three times by the end of this year and achieve investment-grade metrics in 2024. During the quarter, we also reinstated the quarterly dividend, an important milestone that opens the shareholder base to yield-focused investors.”