Delta Bookings Show Luxury Travel May Insulate Airlines From Gloomy Consumers’ Cost-Cutting

“Better than expected” is a description that may, on very rare occasions, be applied to the mostly mediocre wine on a long-haul flight. Thursday, however, Delta Air Lines’ investors applied it to the carrier’s latest quarterly earnings instead of its vino.

The first US airline to report its performance for the three months through September, Delta topped profit estimates and predicted that demand for luxury travel and climbing airfares will help it maintain higher altitudes through the end of 2025 and early 2026.

Put a Premium On It

In the third quarter, Delta reported $16.7 billion in revenue (up 6% year-over-year), $1.7 billion in operating income (up 21%), and an operating margin of 10.1% (up 1.2 percentage points). All better than what Wall Street anticipated. Meanwhile, the Atlanta-based carrier expects to make record earnings in the fourth quarter, with an adjusted profit of $1.60 to $1.90 a share.

Lifting Delta’s growth like a Rolls-Royce engine in the third quarter was a 9% year-over-year increase in premium bookings and an 8% increase in corporate bookings. On the company’s earnings call, Delta CEO Ed Bastian said demand for premium travel hasn’t shown any signs of waning, a good omen for the broader airline industry amid wider consumer pessimism. In fact, Delta made $5.8 billion in premium sales in the quarter, nearly as much as economy travel revenue, which fell 4% to $6 billion. Glen Hauenstein, the airline’s president, said revenue from high-end travel is expected to pass main cabin revenue in 2026. All in all, it was a broadly positive report for the US airline industry after a year of unexpected turbulence:

• In April, major carriers were hit with Wall Street downgrades in the aftermath of the Trump administration’s early tariff policies. A slowdown in travel demand left a glut of open seats on flights, but after airlines culled routes, airfares soared and helped to bring about some stability.
• Shares in Delta rose 4.3% on Thursday and rival United Airlines rose 3.3%, although American Airlines took a 1.6% dip in altitude. United and American are scheduled to report their earnings later this month.

No Shutdown Slowdown (Yet): Air traffic controllers and airport Transportation Security Administration officers are working without pay amid a government shutdown, and Bastian told CNBC there haven’t been “any impacts at all” to Delta’s operation yet. “If this doesn’t get resolved, say beyond another 10 days or so, you probably will start to see some impacts,” he cautioned.