Delta Air Lines reported record revenue in the second quarter, buoyed by Taylor Swift fans traveling to Europe for her concerts. However, concerns about oversupply of seats and discounted airfares overshadowed these gains.
The US carrier announced adjusted revenue of $15.4 billion for the quarter ending June, yet its shares declined as forecasts for peak summer travel fell short of expectations. CEO Ed Bastian acknowledged that increased seating capacity in the domestic market—up 8% from last year—has led to price declines, particularly in economy class.
“While Delta has seen strong revenue from first- and business-class travelers, the lower-fare segments are experiencing significant discounting,” Bastian noted. Analysts expressed worries that this oversupply could force airlines to further reduce fares.
Delta’s shares fell 4% in New York after the company projected adjusted earnings per share for the third quarter to be between $1.70 and $2, below analysts’ forecasts. Bastian highlighted stronger transatlantic travel, fueled partly by younger travelers attending Taylor Swift’s European concerts.
“Transatlantic travel is thriving, driven by pent-up demand post-pandemic and the favorable exchange rate,” Bastian stated. However, concerns linger about excessive seating capacity in both the US and European markets, dampening investor sentiment.
Despite challenges, Delta remains optimistic about continued travel recovery, though uncertainties persist amid ongoing market adjustments.
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