Despite an eventful news day with multiple injuries reported amid canceled flights, Delta leadership was ebullient, reporting record revenue for 2024.
The company reported strong financial results for the December quarter and full year 2024, demonstrating its industry-leading position and continued durability. The airline delivered record December quarter revenue and operating profit, with 2024 revenue reaching an all-time high of $57 billion. Delta generated $5.2 billion in pre-tax income, $8 billion in operating cash flow, and $3.4 billion in free cash flow for the year. Looking ahead to 2025, the company is projecting earnings of over $7.35 per share and free cash flow exceeding $4 billion.
A few key takeaways from their earnings call Friday:
- The company’s $5.2 billion pre-tax income represents nearly 50% of the entire industry’s profitability.
- Delta says it recorded 4 out of 10 top revenue days in company history since Donald Trump’s election.
- The airline was recently named the most on-time airline in North America.
- It announced exclusive partnerships with YouTube and Uber to boost value of its membership program.
- It also announced a $1.4 billion profit share for employees coming Valentine’s Day (how romantic!)
- CEO Ed Bastian honored the legacy of President Jimmy Carter, who “led the deregulation of our industry.”
- When asked about the impact of the ongoing California wildfires and other natural disasters, reps noted that after the unfortunate impact of these events, they actually tend to see an uptick in customers as people arrive to rebuild.
Read the CEO and president’s statements below, and see the company’s press release for additional details.
Ed Bastian, CEO: Good morning. We appreciate everyone joining us today. Before we start, the hearts of the entire Delta family go out to all those who are being impacted by the devastating wildfires in Southern California. We’re incredibly grateful to the heroic first responders who are working at great personal risk to keep our community safe. We announced yesterday that Delta will donate $1 million to the American Red Cross to aid the individuals, families and communities in the region who have been affected.
I also wanted to say a few words on the recent passing of President Carter. As a Georgia-based airline, his life and legacy has had a deep impact on Delta’s mission to connect the world. Among his many accomplishments, his administration led the deregulation of our industry, making air travel more accessible and affordable to all Americans. I had the privilege of knowing President Carter and traveled with him on multiple occasions. He always took the time to personally greet our staff and every single customer on each flight we were on. He was as gracious and genuine a leader as I’ve ever met, a truly great man. His life of service embodied our motto to always keep climbing and on behalf of the entire Delta family, we honor his memory and celebrate the many achievements of President Carter’s life.
Earlier this morning, we reported December quarter and full year results. The Delta team delivered a strong close to the year, both operationally and financially. We reported a December quarter pre-tax profit of $1.6 billion with earnings per share of $1.85 at the top end of our guidance on record revenue and outstanding operational performance. This marks the largest December quarter profit in Delta’s history, improving more than $500 million over last year.
Operationally, we achieved industry-leading performance with a number one system completion factor and on-time performance amongst our peer set throughout the December quarter. I want to thank all 100,000 members of our team for their outstanding efforts, particularly during a busy holiday travel season. For the full year 2024, our operational teams delivered 78 brand perfect days. Last week, Delta was recognized for the fourth consecutive year with Cirium Platinum Award for operational excellence and as the most on-time airline in North America.
Financially, we expect our results will lead the industry across all key measures, with a double-digit operating margin and $5.2 billion of pre-tax income representing nearly 50% of the industry’s profitability. Our return on invested capital of 13% is in the upper half of the S&P 100 and double the rest of the industry. This performance reflects Delta’s sustained differentiation and durability.
Full year earnings per share of $6.16 was above the midpoint of our initial $6 to $7 guidance from the start of the year, when normalizing for the 45 cent impact of the CrowdStrike-caused outage in the September quarter. Free cash flow is expected to lead the industry at $3.4 billion, a nearly $1.5 billion improvement over 2023.
Robust cash generation supported further debt reduction and a 50% increase to our quarterly dividend during the year. Recognizing the strength of our financial foundation, S&P upgraded Delta last month, returning our balance sheet to investment grade level at all three major credit agencies.
Now these results would not be possible without the incredible work of the Delta people. Our employees are the best in the business, and we are proud to recognize their commitment to industry-leading performance with industry-leading rewards. In 2024, we provided our employees with a 5% pay increase, and I’m pleased to announce that we will celebrate them with $1.4 billion in well-earned profit sharing on Valentine’s Day in February. This will represent one of the top three profit sharing payouts in Delta’s history, and is expected to be more than the rest of the industry combined. The Delta people are our number one competitive advantage, and our 2024 performance reflects their commitment to best-in-class operations and service for our customers.
Now, turning to our outlook, 2025 is off to a great start, and we are on track to deliver the best financial year in our history, with revenue growth and margin expansion driving record profitability across the industry. Carriers are taking action to improve their financial health, creating an increasingly constructive backdrop. The U.S. consumer is financially healthy and continues to prioritize spending on experiences. Closing out 2024, we saw an acceleration in air travel demand from corporates and consumers and co-brand card spending growth accelerated.
This momentum is continuing into the March quarter, where we expect to grow the top line by 7% to 9%, expand margins by two points and nearly double earnings over last year.
For the full year, we expect earnings per share greater than $7.35, increasing more than 20% compared to 2024 as reported. When comparing to a normalized EPS excluding the impact of CrowdStrike, this represents growth ahead of our long-term target of 10% average annual growth. Cash generation is an important differentiator for Delta and in 2025 we expect to generate over $4 billion of free cash flow, supporting further debt reduction and bringing our leverage ratio down to two times or less.
As we shared at Investor Day in November, Delta has a clear focus strategy that capitalizes on 15 years of investment in our brand, customer experience, and financial foundation. Entering our next century of flight, Delta has never been more differentiated from the industry as a consumer brand that serves 200 million customers annually. We leverage innovation and technology to empower our people and further elevate the travel experience.
Tuesday night, I had the honor of giving the keynote address at CES 2025 in Las Vegas at Sphere. In that unique space, we honored Delta’s century of connecting the world, presented our vision for the next century of flight and previewed how Delta is driving innovation to deliver more seamless journeys from home to your seat, including new personalized experiences that are arriving in the coming months. This includes the introduction of Delta Concierge, the evolution of Delta Sync, and exciting new partnerships that will enable us to better anticipate customers’ needs and grow the value of SkyMiles membership.
Delta Concierge is a new digital tool built into the Fly Delta app, which will support members as a virtual personal assistant powered by generative AI to make travel easier and less stressful. The next phase of Delta Sync, starting later this year, includes a new and exclusive partnership with YouTube, the world’s largest video platform, to provide access to ad-free YouTube Premium and music streaming on board via Delta Sync seatback screens and our fast free Wi-Fi for SkyMiles members. And we announced an exclusive new partnership with Uber, where SkyMiles members will earn miles for eligible rides and deliveries in the U.S. This unique relationship creates new opportunities to integrate further and expands our partnerships with category leaders, broadening the Delta SkyMiles ecosystem and the range of benefits we provide to our members every day.
Together, these products and partnerships reflect our continued commitment to investing in and providing our customers with a superior travel experience. They drive greater engagement with our SkyMiles members that extend well beyond air travel, improving customer satisfaction and deepening loyalty to Delta.
In closing, Delta’s people continue to differentiate what we deliver for our customers and our owners. With momentum entering our 100th year, we are positioned to deliver another year of industry-leading performance.
And now I’ll turn it over to Glen.
Glen Hauenstein, president: Thank you, Ed, and good morning, everyone. I want to start by thanking our employees for their hard work and dedication in delivering a great year.
December quarter revenue was a record $14.4 billion, 5.7% higher than 2023 and above the top end of our guidance on industry-leading operational performance and strong close-in demand. Post-election, we recorded four of the top 10 revenue days in our history, and saw a step up in booking activity from both leisure and corporate travelers, driving double-digit growth in cash sales.
Total unit revenue grew four-tenths of a point over prior year, with sequential improvement in all geographies. Domestically, unit revenues picked up nicely following the election and international unit revenues improved across all three geographies and performed ahead of our expectations.
Corporate sales grew 10% year-over-year, improving three points sequentially. Strength built through the quarter, driven by both volume and fare with broad-based strength geographically and across all sectors.
We also saw an acceleration in co-brand trends with American Express remuneration of nearly $2 billion during the quarter, up 14% year-over-year on a broad-based acceleration in card spend and acquisitions.
For the full year, we delivered a record revenue of $57 billion, 4% above 2023’s prior record, with diversified streams including premium, loyalty and cargo leading and contributing 57% of total revenue.
Premium revenue performance outpaced main cabin throughout the year, up 8% over prior year, with positive unit revenues in all four quarters of 2024. Total loyalty revenue was up 9% over 2023, with remuneration from American Express reaching approximately $7.4 billion for the year, driven by high single-digit growth in co-brand spend and over 1 million new card acquisitions. We are confident in another year of high single-digit growth in co-brand remuneration in 2025 as we progress towards our long-term goal of $10 billion.
Cargo revenue grew 14% over 2023 with sequential improvement throughout the year.
Turning to our outlook, Delta is capitalizing on demand strength and improving industry dynamics. We expect March quarter revenue to be up 7% to 9% higher than last year, ahead of our capacity growth as unit revenues improve several points sequentially, with progression in all geographies.
The domestic demand remains robust with considerable improvement in the supply backdrop over the last few months, as unprofitable supply is removed across the industry. Delta is well positioned in this environment as we focus on our core strengths and optimize our core hubs.
Transatlantic unit revenue is expected to lead at up mid-single digits for the second quarter in a row. Demand across the Atlantic is benefiting from strong U.S. point of sale and an extension of the season with unprecedented off-peak results. We have good visibility into the spring and summer and expect another year of record profitability in our largest international entity.
Latin unit revenue is expected to improve sequentially for the third consecutive quarter and inflect positive as capacity investments mature, particularly in long-haul South America, where we have increased connectivity with our partner, LATAM.
The Pacific is leading in overall revenue growth. Unit revenues are expected to be modestly negative on mid-teens capacity increases. Trends are improving sequentially, and margins continue to be at record levels.
We congratulate our partner, Korean Air, on closing their acquisition of Asiana. We look forward to expanding our joint venture and increasing our options for our joint venture customers along the Pacific. Following the integration, this merger will facilitate even better connectivity and opportunity to further expand our operations to Seoul over the coming years.
Turning to our network plans for the full year, as we noted in Investor Day, we expect to increase capacity 3% to 4% in 2025, with more than 85% of incremental seats in premium cabins. Domestically, 80% of our growth will be in our most profitable core hubs. And internationally, growth is normalizing following our multi-year restoration and investment phase.
We are confident in our ability to drive margin improvement in 2025 as we focus on efficient growth across high-margin premium cabins and our most profitable hubs, and we are well positioned to capture upside in the main cabin margins as industry health improves.
In closing, we had a great 2024 and I’m excited about Delta’s opportunity to make our centennial the best year in our history.