Delta Air Lines is leaning into a more premium customer base, having seen strong demand from high-income earners.Tim Evans/Reuters
Delta Air Lines DAL-N forecast about 20-per-cent earnings growth in 2026 on Tuesday, citing strong consumer and corporate demand and rising sales of premium travel, and said it has agreed to buy 30 Boeing 787-10 planes to strengthen its long-haul fleet.
Shares of the carrier, however, fell nearly 5 per cent in premarket trading as the forecast was largely below estimates.
The airline has been benefiting from resilient demand among higher-income travellers, even as lower-income consumers face pressure from inflation and weaker spending power.
That divergence was evident in the December quarter, when overall passenger revenue rose just 1 per cent, masking a widening gap within the cabin. Main-cabin ticket revenue fell 7 per cent from a year earlier, while revenue from premium products increased 9 per cent.
Delta CEO Ed Bastian said virtually all of the airline’s planned seat growth is in premium products, with little expansion in the main cabin. New aircraft entering the fleet are configured with heavier premium seating, reinforcing the airline’s long-term strategy.
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Bastian described the outlook as “upbeat,” pointing to record booking trends at the start of the year, but said the airline is maintaining a range for its forecast due to ongoing geopolitical and policy-related uncertainty.
The Atlanta-based carrier expects full-year 2026 adjusted earnings per share of US$6.50 to US$7.50 and free cash flow of US$3-billion to US$4-billion. For the March quarter, Delta forecast revenue growth of 5 per cent to 7 per cent and adjusted earnings of US$0.50 to US$0.90 per share. Analysts surveyed by LSEG expect earnings of US$7.25 a share for the year and US$0.72 for the quarter.
International recovery uneven
International demand remains solid overall, Bastian said, though markets such as Canada and China have yet to fully recover, with capacity to China still well below pre-pandemic levels. He said the upcoming World Cup soccer tournament could help unlock inbound travel, potentially easing a logjam in international demand.
The airline ended 2025 with the highest level of premium and diversified revenue in its history, with nearly 60 per cent of total revenue coming from premium cabins, loyalty programs and other non-ticket sources, including its long-standing partnership with American Express.
“The strength in the consumer sector is at the higher end of the curve,” Bastian told reporters, adding that Delta’s core customers continue to prioritize travel and higher-quality experiences.
The imbalance in consumer spending is also reshaping the broader U.S. airline industry. Low-cost and ultra-low-cost carriers, which rely heavily on price-sensitive travellers, have struggled with weak profitability and excess capacity, prompting consolidation and retrenchment. Allegiant has announced plans to acquire Sun Country Airlines, while Spirit Airlines has entered a second bankruptcy.
“The lower-end consumer is struggling,” Bastian said. “We fortunately do not live there.”
Delta’s fourth-quarter adjusted earnings of US$1.55 a share narrowly beat analysts’ expectations, though results were weighed down by the longest U.S. federal government shutdown on record, which disrupted tens of thousands of flights and cut about US$200-million from quarterly profit.
Earlier in 2025, airlines were also hit by a sharp drop in demand following sweeping U.S. tariffs, which dented consumer confidence. Delta’s 2026 outlook assumes those disruptions will not be repeated.
A Boeing 787-10 Dreamliner at Boeing South Carolina in North Charleston, in 2017. Delta has ordered 30 of the aircraft.Randall Hill
As part of its long-term fleet strategy, Delta will buy 30 Boeing 787-10 wide-body aircraft, with options for an additional 30, with deliveries beginning in 2031. The 787-10 will be a new aircraft type for Delta.
Bastian said the aircraft was selected for its operating efficiency and flexibility on mid-range international routes, particularly across the Atlantic and to South America, where ultra-long-range capability is not required. Compared with larger wide-bodies such as the Airbus A350, the 787-10 is cheaper to operate on many missions, he said.
Over the past 15 years, Delta has leaned toward Airbus, building a fleet centred on the A220 and A320-family narrowbodies alongside its flagship A330 and A350 wide-bodies.
Bastian said the Boeing order reflects a deliberate effort to diversify suppliers, reducing reliance on a single manufacturer as the airline expands internationally. “It’s pretty tough to operate...being reliant on only a single-source provider,” he said.