A Delta plane in the airline's hangar in Atlanta
Leslie Josephs/CNBC
Delta Airlines said Wednesday that sales would grow through 2025, citing a “resilient economy” due to strong demand for travel and credit card spending, especially on higher-end offerings. It also said it expects profits to grow in the coming years.
Delta expects revenue growth of mid-single digit percentage points next year compared to 2024, in line with the roughly 6% growth analysts had expected.
In a presentation at its investor day, the airline said it would expand flying by 3% to 4% next year from 2024. Delta also reiterated its fourth-quarter guidance. Longer term, the company expects to grow adjusted earnings 10% per year over the next three to five years.
Delta is the most profitable U.S. airline and its leaders tout their strong partnership with Delta American Express and the high demand for more expensive seats at the front of aircraft as part of its success.
The airline has focused heavily on high-spending travelers, saying in an investor day presentation that it has an advantage due to sharp wealth growth among high-income households since 2019. The company also said millennials and Gen Z are the fastest-growing consumer segments are.
The optimistic tone regarding consumer spending differs from the picture painted by some other companies. Goal on Wednesday it lowered its profit forecast. The chief operating officer blamed a “slowdown in discretionary demand” and higher costs.
Delta rival United Airlines has made strides in increasing profits and attracting luxury travelers. Shares of Delta are up 60% so far this year through Tuesday's close, while United's is up 128%. Both outpace the broader market and other carriers.
Delta said only 43% of its revenue this year comes from main cabin tickets, with 57% of that coming from premium seats and its lucrative loyalty program. That's more than a 60% share of 2010 main cabin revenue.
The carrier has worked for years to get customers to pay for first-class seats, seats that the airline has largely given away in recent years.
Delta's president, Glen Hauenstein, told reporters that about 15 years ago, about 12% of Delta's domestic first-class seats were paid for and the rest were upgrades for frequent flyers. Now more than 70% of those seats are purchased, including purchases after booking. He said the change was initially “traumatic” for some travelers.
Hauenstein said Delta is looking for new ways to segment its cabins after years of the carrier — and its rivals — dividing the coach class into options like premium economy, extra legroom seats and basic economy. While it didn't provide details, it is also considering more options for travelers sitting at the front of the plane, Hauenstein said.
During the presentation, the airline's executives could face questions about future demand, controlling costs and the steps the airline has taken to prevent another recurrence of the massive impact of the crisis. CrowdStrike outage last July.
-CNBCs Melissa Repko contributed to this article.