Delta Stock Plummets as Earnings Forecast Fails to Meet Expectations Despite Surge in Summer Travel

Money | July 11, 2024, 5:14 a.m.

Delta Air Lines forecasts record revenue for the third quarter due to high summer travel demand, but falls short of analysts' estimates as fares are discounted after adding more flights. Despite a drop in premarket shares, Delta remains a leader in the industry, with a 5% to 6% capacity growth expected in the third quarter. The airline reported adjusted revenue of $15.4 billion in the second quarter, up 5.4% from last year, and expects to break more records in the current quarter. Delta's CEO, Ed Bastian, suggests that lower fare discounting has impacted domestic markets, but with decreased industry capacity and increasing corporate travel, the company remains strong. While facing competition in international flights and an impact from the Summer Olympics in Paris, Delta remains profitable, with a focus on premium seats and other revenue sources. Despite slightly lower expectations, Delta continues to lead the U.S. airline industry in profitability.