DAL Q2 Earnings Prep: More legroom, more dollars
Delta’s results has historically been driven by filling seats. For most of the past decade the largest revenue line was Main Cabin, their standard coach fare. That has begun to change, with premium ticket revenue growing nearly 14% and reaching $5,363M last quarter, nearly level with Main Cabin at $5,404M. Premium revenue is on track to surpass Main Cabin, and that crossover is the central operational story heading into the July 10 report.
For background, DAL 0.00%↑ generates revenue through several channels beyond coach fares. It sells tickets across multiple tiers (Delta One, First, Premium Select, Comfort+, and Main Cabin); it operates the SkyMiles loyalty program, whose largest cash contribution comes from selling miles to American Express for distribution to cardholders; and it owns an oil refinery through Monroe Energy, intended to hedge jet fuel costs. The premium cabins and the American Express relationship are the high-margin core of the business, while the refinery is the most variable element.
Delta’s strategy over recent years has been to segment the cabin in order to charge more for premium products, expand the loyalty program so that a growing share of profit comes from a credit-card partnership, and reduce the debt taken on in 2020 to return toward investment grade.
The following items will be our focus heading into Friday’s report:
Premium Versus Main Cabin. Premium ticket revenue rose from $4,707M to $5,363M in the March quarter, an increase of about 14%, while Main Cabin rose from $5,361M to $5,404M, less than 1%. In the prior-year June quarter, premium was $5,899M against Main Cabin’s $6,347M, which makes the June quarter the most likely point for premium to surpass coach. The figure to watch is premium revenue at or above Main Cabin. We’ll look to see if premium leads while coach remains flat, indicating that management’s segmentation strategy is working. In contrast, if both slow together, it says that demand has softened broadly, e.g. due to macro conditions.
American Express. The cash Delta receives from American Express continues to grow. Quarterly cash sales to AmEx increased from $1.9B a year earlier to $2.2B
in the March quarter, and loyalty deferred revenue, the miles sold but not yet flown, rose from $8,978M to $9,458M. This is high-margin revenue that does not depend on filling individual flights, and we’re watching for AmEx remuneration to maintain double-digit growth.
Unit Costs. The central tension is that revenue has been growing, but March-quarter operating income declined from $569M to $501M as costs rose faster. Non-fuel unit cost, the CASM-Ex metric the airline manages to, increased from
14.23 cents to 15.13 cents, up 6.3%, even as total unit revenue rose to
22.92 cents. We will listen for CASM-Ex growth guidance: low single digits would keep margins expanding.
The Refinery. The item most likely to complicate quick coverage is Monroe Energy. The refinery posted an operating loss of $39M in the March quarter, after a -$1M result a year earlier and a +$53M result last September, with the latest swing driven by fuel-hedge settlement timing. That volatility is one reason GAAP diluted EPS was a loss of $0.44 in the March quarter, compared with a positive $0.37 a year earlier. The airline itself was profitable, but the refinery distorted headline numbers. Overall, we’ll be looking to assess the airline result on its own before any comparison to consensus.
The Balance Sheet. Delta reduced long-term debt from a 2020 peak of $26.5B to $11.9B at the end of 2025, and on June 11 refinanced its revolver into a $2.65 billion undrawn facility (per its 8-K), a routine measure rather than a material event. The underlying productivity gains are substantial: Delta held headcount roughly flat at about 103,000 across 2023, 2024, and 2025 while consolidated revenue grew to $63.4B, approximately $615K per employee. United, on $59.1B of revenue and 113,200 employees, is closer to $522 K. Watch the pace of deleveraging and any commentary on reaching full investment-grade status.
Consensus is around $1.43 in adjusted EPS for the June quarter, down from $2.10 a year ago, against management’s guidance of $1.00 to $1.50 (per Barchart and Delta’s guidance). The stock trades near $92.80, just below its 52-week high, with an average analyst target of $84.93 and a Street-high near $105. Delta earned $7.66 in diluted EPS on $5,822M of operating income in 2025, suggesting the story of a profitable airline being tested on whether its strongest quarter can remain strong. The decisive figure Friday is premium revenue relative to Main Cabin: if premium outearns coach while unit costs stay contained, Delta’s shift toward a premium revenue model is working well.
All data sourced via #deepKPI from Delta’s FY2025 10-K, March 2026 10-Q, and recent 8-Ks, with additional context from analyst reporting and market data. DAL 0.00%↑ reports July 10 before the open.