DALDelta Air LinesQ2 FY2026Earnings Analysis

Revenue grew on pricing strength and broad-based demand

Total operating revenue increased $3.1B to $19.8B in the June 2026 quarter, driven by $1.7B higher passenger revenue from stronger pricing amid rapid fuel cost increases and broad-based demand across premium, main, corporate and loyalty, plus higher refinery sales and growth in cargo and MRO. Adjusted revenue excluding third-party refinery sales rose $2.2B, or 14%, to $17.7B.

Source: Source: 10-Q Item 2 MD&A, p.18, p.19, p.30

Fuel inflation was the main margin headwind

Total operating expense rose $3.3B, or 23%, to $17.9B in the quarter, led by a $1.7B increase in aircraft fuel and related taxes. Management said this was primarily due to an 80% increase in average jet fuel purchase price, while total CASM rose 21% and CASM-Ex increased 6.8%, contributing to operating income declining to $1.9B.

Source: Source: 10-Q Item 2 MD&A, p.18, p.21, p.25

Non-operating income declined sharply due to investment mark-to-market

Total non-operating income fell to $145M from $472M in the June 2025 quarter, primarily because of lower mark-to-market gains on certain equity investments. The filing shows gain on investments, net was $349M in the quarter versus $735M a year earlier.

Source: Source: 10-Q Item 2 MD&A, p.18, p.23

The company’s operating income declined even as revenue increased, with aircraft fuel and related taxes up sharply year over year. Fuel expense increased 67% in the quarter, and management said elevated jet fuel costs are expected to persist until recent market disruptions and geopolitical events are resolved, which could continue to pressure margins.

Source: Source: 10-Q Income Statement (XBRL), 10-Q Item 2 MD&A, p.21