Key Takeaways

  • Delta's load factor was 69%, ahead of analyst predictions of 65%.
  • Improving load factor signals that the company is filling a higher percentage of airplane seats with passengers – a key step toward recovery.
  • A record number of new customers signed up for Delta's SkyMiles rewards account in June 2021.
Delta Air Lines Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted Earnings Per Share Beat -$1.07 $-1.50
Revenue (billions) Beat $6.3 $6.2
Load Factor Beat 69% 65%

Source: Predictions based on analysts’ consensus from Visible Alpha

Delta Air Lines (DAL) Financial Results: Analysis

Delta Air Lines, Inc. (DAL) reported Q2 FY 2021 earnings that beat analyst predictions across the board. The passenger airline's adjusted net loss per share was narrower than consensus estimates and marked a significant year-over-year (YOY) improvement.

Revenue slightly outperformed analyst expectations and was the highest in five quarters, although it was still only about half of the figure from Q2 FY 2019 before the COVID-19 pandemic. Delta predicted that total revenue for Q3 FY 2021 will be down between 30% and 35% relative to Q3 FY 2019. Note that Delta provided Q2 FY 2019 figures for comparison in its earnings release, but Investopedia is generally utilizing Q2 FY 2020 figures from the company's earlier reports.

Delta's load factor of 69% also beat analyst predictions. Load factor is a key measure of the company's efficiency. This metric measures the percentage of available seating capacity that is filled with passengers. A high load factor, as opposed to a low load factor, is associated with a high percentage of seats occupied by passengers. Because the costs of sending an aircraft into flight are relatively the same whether there are 50 people aboard or 100, airlines have a strong incentive to sell more tickets in order to fill seats.

Load factor for Q2 FY 2021 of 69% was vastly improved over 34% for Q2 FY 2020, which marked the lowest load factor in recent company history. However, while load factor has improved as customer travel has recovered, it is still significantly below pre-pandemic levels, which typically hovered in the mid-80s.

Delta shares traded up about 1.8% in pre-market trading following the company's earnings release at about 7:30 a.m. on July 14, 2021. The company's stock has outperformed the broader market in the past year, providing total returns of 54.1% versus 38.5% for the S&P 500.

Delta Air Lines (DAL) Earnings Call Recap

Delta CEO Ed Bastian said in the earnings release that the company anticipated moving toward sustainable profitability in the second half of 2021 thanks to strong recovery in domestic leisure travel. He added in an interview on CNBC that U.S. consumer travel is "beyond" the levels seen in 2019, while business and international travel have additional ground to recover.

Bastian cited this demand as a reason why quarterly losses, which have hovered around $3 billion during the pandemic, narrowed to less than $900 million for Q2 FY 2021. He reiterated that the company expects to be "solidly profitable" and for that profitability to continue into the final quarter of the year and beyond.

Delta's next earnings report is estimated to be released on Oct. 14, 2021.