Passenger service drives the company’s revenues
Reviewed by Eric EstevezReviewed by Eric Estevez
Delta Air Lines is a global airline that provides air transportation services for passengers and cargo through its main fleet and various subsidiaries.
The airline and its partners fly to and from more than 130 countries and territories. At the close of 2023, it was offering over 4,000 daily flights to more than 280 destinations on six continents.
It has core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City. Its coastal hubs include Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle. Together, these hubs support customers loyal to Delta, provide the company with a competitive cost advantage, give it a strong presence in high revenue markets, and spur the purchase of its premium tickets and international flights. The airline has a significant international hub presence, as well.
Delta is part of the SkyTeam and SkyTeam Cargo international alliances, which allows it access to the route networks of other airlines. It has air service agreements with regional airlines in the U.S., as well.
The company generates other revenue through its Delta TechOps maintenance and engineering businesses and Delta Vacations, its vacation wholesale subsidiary.
Delta is committed to environmental sustainability and plans to meet its airline operations goal of net-zero greenhouse gas emissions by 2050.
Key Takeaways
- Delta Air Lines is a global airline providing air transportation for passengers and cargo.
- Headquartered in Atlanta, Delta’s history dates back to the 1920s.
- In June 2024, Delta was the largest airline in the world based on market capitalization.
- For its fiscal year 2023, total operating revenue was $58.04 billion.
- Delta is a leader of airlines in customer satisfaction.
Delta Air Lines’ Industry
Delta Air Lines (DAL) operates in the Airlines industry within the Industrials sector.
The company believes that its established advantage over its competition relates directly to its focus on its people and culture, reliable operations, global network, customer loyalty, and financial strength.
Technological innovation also serves to differentiate it from competitors. Digital technology in particular can improve and enhance customer experience, its airline operations, and the efforts of employees. Innovation can strengthen its brand, improve efficiency, and support increased revenue.
Delta continues to diversify its business to add revenue streams that can also sharpen its competitive edge. In this regard, the company points to its:
- Premium products such as its aircraft classes (Delta One®, First Class, Delta Premium Select, and Delta Comfort+®)
- Partnership with American Express
- Maintenance, repair, and overhead program
- Cargo and travel services businesses
Competition
Delta faces competition on routes, fares, schedules, operational reliability, services, products, customer service, and loyalty programs. Industry consolidation also poses challenges from airlines and alliances with noteworthy financial resources, far-reaching global networks, and aggressive cost structures.
Domestic rivals include:
- American Airlines (AAL)
- United Airlines (UAL)
- Alaska Airlines (ALK)
- JetBlue Airways (JBLU)
- Southwest Airlines (LUV)
- Allegiant Air (ALGT)
- Avelo Airlines
- Breeze Airways
- Frontier Airlines (ULCC)
- Spirit Airlines (SAVE)
International competition is represented by various joint ventures and alliances. Individual rivals include:
- American Airlines
- United Airlines
- Lufthansa German Airlines
- Air Canada
- British Airways
- Qantas
Note
In June 2024, Delta was the largest airline in the world as measured by market cap.
Delta Air Lines’ Financials
As of June 2024, Delta’s market capitalization was $31.9 billion.
Delta’s 2023 annual report reported the company’s financial results for the 2023 fiscal year (FY). Additionally, on April 10, 2024, the company announced financial results for the first quarter of 2024, ended March 31, 2024.
Delta has two operating segments: Airline and Refinery. The airline segment represents all air transportation services for passengers and cargo worldwide, as well as the company’s customer loyalty program and ancillary airline services.
The refinery segment represents Delta’s wholly-owned subsidiary Monroe Energy, which operates an oil refinery business that supplies jet fuel to Delta’s airline operations.
However, rather than by segment, Delta breaks down its total Operating Revenue into three categories: Passenger, Cargo, and Other.
Passenger revenue is derived from ticket sales, loyalty travel awards, and travel-related services. Cargo revenue is derived from cargo transport sales. Other revenue is derived from refinery sales to third parties, loyalty program (brand usage by third parties), ancillary businesses (aircraft maintenance services for third parties and vacation subsidiary sales), and miscellaneous sales.
Operating Revenue
For FY 2023, total operating revenue was $58.04 billion, an increase of 14.7% over the previous year’s $50.82 billion. For the first quarter of FY 2024, revenue was $13.74 billion, an increase of 7.8% over the previous year’s first quarter.
Passenger Revenue
For FY 2023, Passenger revenue was $48.9 billion, an increase of 21% over the previous year’s $40.21 billion. For the first quarter of FY 2024, revenue was $11.13 billion, an increase of 7% over the previous year’s first quarter.
Cargo Revenue
For FY 2023, Cargo revenue was $723 million, a decrease of 31% from the previous year’s $1.05 billion. For the first quarter of FY 2024, revenue was $178 million, a decrease of 14% from the previous year’s first quarter.
Other Revenue
For FY 2023, Other revenue was $8.41 billion, a decrease of 9.6% from the previous year’s $9.31 billion. For the first quarter of FY 2024, revenue was $2.44 billion, an increase of 14% over the previous year’s first quarter.
Operating Income
For FY 2023, operating income was $5.5 billion, an increase of nearly 51% over the previous year’s $3.66 billion. For the first quarter of FY 2024, operating income was $614 million, a significant increase over the previous year’s first quarter loss.
Net Income
For FY 2023, net income was $4.6 billion, an increase of 249% over the previous year’s $1.31 billion. For the first quarter of FY 2024, net income was $37 million, a significant increase over the previous year’s first quarter loss.
History and Leadership
Delta Air Lines’ roots go back to 1925 and the establishment of crop dusting company Huff Daland Dusters in the Mississippi Delta. It was renamed Delta Air Service and incorporated in 1928. Its first commercial passenger flight took off in 1929.
Ed Bastian has been the company’s CEO since 2016. He is a 25-year veteran of the company and in 2018 was included in Fortune magazine’s list of “The World’s 50 Greatest Leaders.” He has received numerous other leadership awards.
Bastian is considered to have been pivotal in expanding Delta’s global footprint and improving the customer experience. Prior to joining Delta, Ed worked at Frito-Lay International, Pepsi-Cola International, and Price Waterhouse.
Glen Hauenstein has been President of Delta Air Lines since 2016. John Laughter is Delta’s Executive Vice President, Chief of Operations and President, Delta TechOps.
Recent Developments
• In May 2024, J.D. Power ranked Delta as the top airline for passenger satisfaction with its First/Business Class and Premium Economy. The consumer intelligence company found Delta to be number one in the categories of day of travel pre-/post-flight experience, on-board experience, ease of travel, digital tools, airline staff, and level of trust.
• In February 2024, Delta announced that it would launch a new seasonal route from Los Angeles to Brisbane, Australia in December 2024. It would operate several times weekly until March 28, 2025. In total, Delta will offer 17 flights each week from the U.S. to Brisbane and Sydney.
What’s the Value of a Share of Delta Air Lines Stock?
On June 21, 2024, a share of Delta Air Lines was trading at $49.48.
Does Delta Pay a Dividend Regularly?
Yes, it does. On June 20, 2024, Delta’s Board declared a quarterly dividend of $0.15 per share. It is payable to shareholders of record as of the close of business on July 30, 2024, and will be paid on August 4, 2024.
Was Delta Profitable in 2023?
Yes, the company posted net income of $4.6 billion for its 2023 fiscal year.
The Bottom Line
Delta Air Lines is a domestic and international passenger and cargo air transport company that traces its beginning to a crop dusting company founded in the 1920s. It makes most of its revenue from its passenger services. As of June 2024, it was the largest airline in the world, as measured by market capitalization.
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