Delta Air Lines made $2 billion in the fourth quarter, had record full-year revenue, and is buying more planes for foreign flights. The airline's shares plunged 9% Friday after it lowered its 2024 profit prediction. Delta forecast full-year earnings of $6 to $7 per share, down from more than $7. Although analysts had previously lowered their projections to $6.50 a year, Delta's news spooked investors.
Delta posted fourth-quarter earnings first, sending American, United, Southwest, Alaska, and JetBlue down 4% to 11%. Delta said Friday that it will acquire 20 Airbus A350s and may buy 20 more. Delta should receive the first in 2026.
A350s will feature more luxury seats than their predecessors, which will help Delta attract high-end customers who are less affected by the downturn. In 2023, travelers who spent most of the epidemic at home boosted airline demand. Last year, Delta customers traveled 19% more than in 2022.
We actually saw the highest cash sales day in our history on Tuesday,” Bastian said in an interview. “Our consumer is financially healthy and wants to travel. That suggests 2024 will be a great year.”
Bastian worried about greater maintenance expenses due to supply-chain interruptions and engine and aircraft manufacturing difficulties that delayed new jet deliveries.
Delta earned $2.04 billion in the fourth quarter, more than double the $828 million profit of the previous year. Its adjusted profits per share were $1.28 excluding extraordinary items. The FactSet survey found that exceeded analysts' average prediction of $1.16 per share.
Revenue climbed 6% to $14.22 billion. Spending on premium services like business class rose 15%, while passenger revenue rose 12%. Delta's Pennsylvania refinery lost $579 million, 51%, compared to last year.
Labour costs rose 23% due to higher salaries, mainly from a contract union pilots signed in March last year. Delta earned almost $58 billion last year, up 15%. Net income increased to $4.61 billion from $1.32 billion in 2022. Delta's $4.77 billion full-year earnings fell short of pre-pandemic 2019, but it was enough to acquire more planes.
Delta's fleet of almost 900 planes—excluding regional affiliates—consists of Airbus and Boeing. It possessed 28 A350s at the end of September and plans to buy 16. With options, Friday's order may bring the total to over 80 A350s.