Delta Earnings: Premium Travel Demand Saves Firm

Key Morningstar Metrics for Delta Air Lines

• Fair Value Estimate
  : $48.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : Very High

What We Thought of Delta Air Lines’ Earnings

Delta Air Lines DAL earned 12% less operating profit on 13% more revenue and 1% more capacity in the first quarter, compared with 2025. Salaries increased 11% since last year, while fuel expenses climbed 14%. The firm’s premium cabin sales rose 14% versus 2025, while economy seating revenue was essentially flat.

Why it matters: Delta’s industry-leading segmentation of its travel offerings allows it to outearn peers and command an outsize share of industry profits. Its fortunes are tied to continued demand for premium travel experiences from well-heeled consumers.

• Travel demand so far in 2026 closely resembles the overall volume of early 2025, with about 2% more travelers passing through security by the end of March. Delta’s premium-ticket sales continue to outpace economy ticket sales, and ticket prices are on the rise industrywide following the fuel cost spike.
• Management indicated it will pare back capacity growth to about flat in the second quarter, which we view as prudent, given that the marginal traveler may begin to balk at persistently higher fares.

The bottom line: We have decreased our fair value estimate for no-moat Delta’s shares to $48 per share from $56, reflecting a pinch in near-term profit due to higher fuel costs and higher capital outlays than we had previously forecast.

• Even with our forecast of nearly $8 billion in EBITDAR in 2026, Delta’s shares seem overvalued, as we do not anticipate that market conditions will allow the airline to maintain such outsize profits indefinitely.