Delta Air Lines has forecast pre-tax profit of $1.5 billion for the third quarter of 2024 and has put $640 million into a profit share scheme for its staff.

The US carrier, which announced second quarter trading figures to June last week, reported a record quarter with pre-tax income of $2 billion with a 15 percent operating margin.

Adjusted debt to EBITDAR was reported to be 2.8x, down from 3.0x at the end of 202, and return on invested capital came in at 13.1%.

Delta’s GAAP financial results for the three months showed payments on debt and finance lease obligations of $1.4 billion and total debt and lease obligations of $18 billion at the end of the quarter.

Ed Bastian, Delta chief executive, said: “Thanks to the incredible work of our 100,000 people, Delta is delivering industry-leading operational performance and best-in-class service for our customers.

“We delivered record June quarter revenue and pre-tax income of $2 billion with a 15 percent operating margin.

“Our people are the best in the industry, and we are pleased to recognise their efforts with more than $640 million accrued in the first half toward next year’s profit sharing.

“For the September quarter, we expect a double-digit operating margin and a pre-tax profit of approximately $1.5 billion.

“With strong first half results and visibility into the second half, we remain confident in our full-year guidance.”

Glen Hauenstein, Delta president, added: “Peak summer travel demand remains strong and Delta is delivering elevated experiences for our customers.

“Consistent with our guidance, we generated record June quarter revenue 5.4% higher than the prior year.

“Diverse revenue streams, including premium and loyalty, contributed higher growth and margins, underpinning Delta’s industry-leading financial performance and increasing our financial durability.

“As our international network and core hubs approach full restoration and we return to a normal cadence of retiring aircraft, Delta’s capacity growth is decelerating into the second half.

“We expect September quarter capacity growth of 5% to 6% and revenue growth of 2% to 4%, with sequential improvement in unit revenue trends through the quarter.”

Delta second quarter revenue was 5.4% higher than 2023. Year to date, the airline has “led the industry in completion factor and on-time performance, and operated 39 cancel-free, brand-perfect days,” it stated.

The carrier also reported that premium, loyalty and other diversified revenue streams comprised 56% of its total.

Premium revenue grew 10% versus the same period in 2023, with premium unit revenues positive year-on-year. Meanwhile loyalty revenue was up 8%, due to co-brand spend growth and increasing premium card mix.

Remuneration from American Express for the June quarter was $1.9 billion, approximately 9% higher than 2023. Cargo revenue grew 16% year-on-year.

Managed corporate travel volumes were up double-digits for six consecutive months, with Delta reporting “broad-based demand as all sectors increased year-on-year”.

International passenger revenue was 4% higher than June quarter of 2023 with demand Transatlantic demand said to be “very strong” and unit revenue in line with last year’s record performance excluding the impact from the summer Olympics in Paris.

Pacific and Latin America accounted for the majority of international capacity growth on continued network restoration and improving connectivity with our JV partners.

Operating expense for the quarter to June was $14.4 billion and adjusted operating expense came in at $13.1 billion.

The carrier’s adjusted fuel expense of $2.8 billion was up 12% year-on-year while adjusted fuel price of $2.64 per gallon increased 5% year-over-year.

Fuel efficiency (gallons per 1,000 ASMs) was 14.3, a 1.1% improvement year-over-year

Dan Janki, Delta chief financial officer, said: “For the June quarter, we came in at the midpoint of our guidance with earnings of $2.36 per share.

“Delta’s operational excellence drove an incremental point of capacity growth and unit cost favourability, with non-fuel unit costs 0.6% higher than last year.

“Growth continues to normalize and our teams are consistently running a great operation, enabling us to deliver efficiency.

“In the September quarter, we expect non-fuel unit costs to increase 1% to 2% year-over-year as capacity growth moderates.”

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