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Delta's Record Quarter Includes Big Boost in Premium Ticket Revenue

April 10, 2019
4 min read
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Delta's Record Quarter Includes Big Boost in Premium Ticket Revenue
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Delta just recorded its best-ever March quarter in terms of revenue. With adjusted operating revenue of $10.4 billion excluding refinery sales, the 7.5% year-over-year uptick led to $220 million being set aside for next Valentine's Day. That day, known to Delta employees as profit sharing day, saw a staggering $1.3 billion handed out earlier this year, while competitors dished out far less — $544 million at Southwest, $334 million at United and $175 million at American.

Perhaps unsurprisingly, given Delta's continued push to sell more of its forward cabins rather than give them away in the form of complimentary Medallion upgrades, the airline reported an 8% surge in premium product ticket revenue and double-digit percentage increases in loyalty and Maintenance, Repair and Overhaul revenue. Per Delta, 55% of this quarter's revenue was generated by "premium products and non-ticket sources." On Delta's earnings call, CEO Ed Bastian noted that this figure is "up from less than 40% in 2011."

A Boeing 777-200 sits in a Delta hangar at ATL. (Photo by Darren Murph / The Points Guy)

It appears that the broader economy is still shining, with double-digit growth in domestic corporate revenue (mirroring United) and an approximate one-point benefit from the newly extended American Express agreement. Meanwhile, Delta Cargo revenue declined 5% on lower volumes.

The airline also cited a $1.3 billion investment into the business, largely attributed to aircraft purchases (hello, A220 and A330-900neo!) and refurbishments, which are ongoing across its 767-400 and 777 fleets.

Delta's all-new Delta One seat, featured on refurbished Boeing 767-400 aircraft. (Rendering courtesy of Delta Air Lines)

March quarters have historically been tough on on-time performance metrics given the volatility that comes with US winters. This time around, Delta managed to achieve its highest network system completion factor for the first quarter since 2012. That included 69 days of zero mainline cancellations, 28 days of zero system cancellations and mainline on-time performance (A0) of 72.0% for the March quarter.

Other metrics included an adjusted net income increase of 20.8% ($639 million for Q2 2019 compared to $529 million in Q1 2018) as well as a 2.4% improvement in total revenue per available seat mile (how much Delta makes from each passenger on each mile flown, known as TRASM). Fuel expenses rose 4.6% from the prior year. Evidently, the negative impact from the US government shutdown was masked by strong performance elsewhere, as it didn't warrant even a passing mention in the release to investors.

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Delta's Q2 2019 forecast is rosy as well. It's expecting a 6% to 8% uptick in adjusted revenue, a 1.5% to 3.5% boost in TRASM and a system capacity increase between 4% and 4.5%.

Delta is the first of the major carriers to announce Q1 2019 earnings. United is expected to announce its earnings on April 17, 2019, while American Airlines, Southwest and JetBlue will report before the end of the month. Delta Air Lines stock is up nearly 3% in pre-market trading.

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Featured image by A Delta jet awaits departure from Kahului Airport in Maui (Photo by Darren Murph / The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees