Delta Air Lines (DAL) gains on strong Q2 2025 performance

Shares of Delta Air Lines (NYSE: DAL) rose 12% on Thursday after the company delivered strong results for the second quarter of 2025 and restored its guidance for the full year. The top and bottom line numbers beat expectations and the airline benefited from its diverse revenue streams during the quarter.

Better-than-expected results

Delta’s operating revenue remained flat year-over-year at $16.6 billion in Q2 2025 but exceeded estimates of $16.1 billion. Adjusted operating revenue grew 1% to $15.5 billion. GAAP earnings per share rose 63% to $3.27 in Q2 versus the previous year. Adjusted EPS fell 11% YoY to $2.10 but managed to surpass projections of $2.03.  

Business performance

During the second quarter, Delta saw demand trends stabilize at levels comparable to last year and it benefited from its diverse revenue streams that drove high margins. Unit revenue, or TRASM, was down 4% YoY in Q2 while capacity was up 4%. Passenger revenue per available seat mile, or PRASM, was also down 4%. Passenger load factor was 86%.

Domestic revenue was down 1% in Q2 but international revenue grew 2% on strong performance during the peak summer period. Pacific revenue rose 11%, helped by capacity growth and network restoration, while Atlantic revenue grew 2% on strong demand for travel during the summer.

Corporate travel demand remained steady with sales up low-single-digits YoY. Premium revenue rose 5% YoY, outpacing main cabin. Loyalty revenue grew 8%, driven by growth in co-brand spend and card acquisitions.

Cost per available seat mile (CASM) was down 3% in Q2. Non-fuel unit cost, or CASM-ex was up 2.7%. Average fuel price per gallon was down 16% to $2.21.

Outlook

For the third quarter of 2025, Delta expects total revenue to be flat to up 4% YoY. The company expects unit revenue trends to improve through the latter half of the year as it continues to adjust capacity and the industry rationalizes supply. DAL expects CASM-ex in Q3 2025 to be flat to down compared to last year. Operating margin is expected to be 9-11% and EPS is expected to be $1.25-1.75.

Delta restored its guidance for fiscal year 2025 and expects EPS to range between $5.25-6.25. CASM-ex is expected to see low single-digit growth YoY in 2025.