Key Takeaways

  • Delta's load factor surpassed analysts' expectations.
  • Load factor is a key metric showing the percentage of a carrier's available seats that are filled with paying passengers.
  • Delta reported its first profitable quarter since the start of the COVID-19 pandemic.
Delta Air Lines Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted Earnings Per Share Beat $0.30 $0.25
Revenue Beat $9.2B $8.4B
Load Factor Beat 80% 77.7%

Source: Predictions based on analysts' consensus from Visible Alpha

Delta Air Lines (DAL) Financial Results: Analysis

Delta Air Lines, Inc. (DAL) reported Q3 FY 2021 earnings that beat analysts' consensus estimates. Adjusted earnings per share (EPS) came in above analyst forecasts and were positive for the first quarter since the final quarter of FY 2019. Delta's revenue also surpassed analyst estimates, up 199.0% year over year. Its load factor exceeded analyst expectations. The company's shares were down more than 1% in pre-market trading. Over the past year, Delta's shares have provided a total return of 33.4%, above the S&P 500's total return of 23.1%.

DAL Load Factor

Delta's load factor was 80% for the third quarter, higher than in any other quarter since the start of the pandemic but still below pre-pandemic levels. Load factor is a key metric indicating the percentage of a carrier's available seats that are filled with paying passengers. A high load factor, as opposed to a low load factor, indicates that a high percentage of seats are 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 fill as many seats as possible by selling more tickets. Higher load factors mean an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable.

Travel demand has continued to recover after it was decimated last year amid the pandemic. Delta's load factor has gradually increased after reaching a low point of 34.2% in Q2 FY 2020. The increase in demand for travel has also boosted Delta's revenue, and the company expects revenue in the fourth quarter to recover to the low 70s percentage compared to 2019, before the start of the pandemic.

Delta's next earnings report (for Q4 FY 2021) is estimated to be released on Jan. 12, 2022.