Delta Air Lines reiterated its optimistic view on travel demand as it reported record second-quarter revenue.
“For the September quarter, demand momentum continues,” CEO Ed Bastian said during the airline’s Q2 earnings call on Thursday.
Delta, he elaborated, expects double-digit, year-over-year revenue growth for the third quarter and an operating margin percentage in the mid-teens.
Delta president Glen Hauenstein echoed Bastian’s confidence.
“We see strong demand both domestically and internationally as far as we can see,” he said. Hauenstein added that Delta has vision on international demand into October. Domestic demand has also shown positive trends during the summer, with more close-in bookings.
The executives’ bullish analysis of demand came one day after the latest Consumer Price Index showed that airfares dropped 8.1% between May and June, even when adjusted for normal seasonal price declines between those months. June airfares were down 18.9% from a year earlier.
The Consumer Price Index calculates airfares by looking at international and domestic commercial airline trips, excluding trips designated as business travel.
Hauenstein said that Delta isn’t seeing the same trend lines as the index is reporting, and noted that the Bureau of Labor Statistics uses different data points than the airline.
Bastian added that in comparing prices to last year, it’s important to remember that demand was super-charged last spring, with many travelers determined to go wherever they could with the lifting on Covid-19 pandemic restrictions.
“That’s obviously not sustainable, and that’s in the data they are comparing to as well,” he said.
For the second quarter, Delta reported net income of $1.83 billion, up from $1.09 billion a year earlier.
The carrier recorded $15.58 billion in operating revenue, up 13% year over year and besting analyst expectations by $120 million, according to the investment website Seeking Alpha. Revenue gains were driven by a 61% increase in international revenue, Hauenstein said. Delta’s operating margin was a strong 16%.
The carrier’s operating expense for the second quarter was $13.09 billion, up 6%.
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