Delta Air Lines’ stock flew high during the Jan. 10 trading session in a down market, on solid demand for traveling and a differentiation strategy. They boosted revenues and earnings and made 2024 the best year in the company’s history.
“2024 was a great year for Delta, with our results reflecting differentiation from the industry and increased durability. Our people finished the year strong, delivering industry-leading operational and financial performance. Sharing Delta’s success is core to our culture, and I’m excited to recognize our people’s outstanding efforts with $1.4 billion in profit-sharing payments next month,” said Ed Bastian, Delta’s chief executive officer, in a statement following the release of December and full year financial results of the company.
“As we move into 2025, we expect strong demand for travel to continue, with consumers increasingly seeking the premium products and experiences that Delta provides. Our differentiated strategy, best-in-class operations, demand strength, and an increasingly constructive industry backdrop position us to deliver the best financial year in Delta’s 100-year history.”
Delta and other airliners have benefited from a robust U.S. economy and consumer spending, including spending on travel, which is expected to reach as much as $1.22 trillion by 2027.
The company’s efforts to monetize its assets better include broadening seat choices by creating new seats, including “premium” and “premium select” with higher price tags. It’s a smart way to boost its top and bottom financial lines.
Wall Street liked Delta’s financial take-off, with its shares gaining 58 percent over the last twelve months compared with 22 percent of the S&P 500. But they lag far behind the S&P 500 over five years.
Analysts joined Wall Street in cheering Delta’s performance, providing further insight into its winning business strategy. David Materazzi, CEO of Galileo FX, an automated trading platform, is one of them.
“I think that the foundation for Delta Air Lines’ dominance has already been laid: the only question is how long it will take for others to catch up,” he told The Epoch Times via email.
“Every move, expansion of its fleet, refinement of loyalty programs, and focus on premium services have been positioned to secure market share and leadership. Doubts will always linger, as the airline industry has been defined by unpredictability, where fortunes are shaped as much by external forces as by strategy.”
Still, Materazzi believes Delta’s strategy is a blueprint for the industry. “For those seeking investments with transformative potential, the groundwork for success here is unmistakable,” he said.
Julian Kheel, CEO and founder of Tripsight, Inc., praised the company’s ability to shake off the airline industry’s challenges and the price differentiation strategy to deliver superior financial results.
“While Delta had some significant operating issues in 2024, including a multi-day meltdown in July triggered in part by the faulty Crowdstrike software update, the carrier still managed to post an impressive 10.6% operating margin for the year,” he told The Epoch Times via email.
“The carrier is well positioned to continue to take advantage of travelers’ desire for access to premium experiences in 2025. Increases in revenue from sales of premium seats ran ahead of revenue from economy fares in the 4th quarter of 2024, and the carrier is likely to continue to see additional increases in revenue from these travelers.”
In addition, Kheel cheered Delta’s announcement of a 10 percent profit-sharing distribution to its employees for 2024, representing approximately five weeks of bonus pay.
“The airline continues to lead the domestic industry when it comes to profit sharing with its non-unionized workforce, though it still pales compared to some international carriers,” he said.
Still, Georgios Koimisis, an economics and finance associate professor at Manhattan University, is skeptical about the sustainability of Delta’s solid financial performance, citing rising costs—particularly fuel price volatility—as a significant challenge for the airline industry.
“Proposed policy changes under the new US administration like the boosting domestic oil production or rolling back renewable energy incentives could lead to unpredictable fuel price swings,” he told The Epoch Times via email. “For an airline dependent on stable fuel costs, this uncertainty complicates planning and profitability.”
Koimisis also believes that Delta is in a better position than the rest of the industry to cope with oil price volatility. Delta owns its oil refinery, which gives it reasonable control over fuel costs, while its diversified revenue streams, such as its American Express partnership, help minimize the impact of volatility.
“Balancing these strengths with rising costs and investments in passenger experiences, such as its Uber partnership and ad-free YouTube offerings, will be key to maintaining Delta’s competitive edge,” he said.
