Delta Air Lines, Inc.
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data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. MD&A
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes included in our 2025 Form 10-K.
March 2026 Quarter Financial Highlights
Our operating income for the March 2026 quarter was $501 million, a decrease of $68 million compared to the March 2025 quarter.
Revenue. Compared to the March 2025 quarter, our total revenue increased $1.8 billion. Passenger revenue increased $822 million compared to the March 2025 quarter on an increase in revenue for premium products, particularly from corporate customers, and higher loyalty revenue. In addition, the increase in total revenue was driven by higher refinery sales to third parties and growth in our MRO business. Total revenue, adjusted (a non-GAAP financial measure, which excludes revenue related to refinery sales to third parties) increased in the March 2026 quarter by $1.2 billion, or 9.4%, compared to the March 2025 quarter.
Operating Expense. Total operating expense in the March 2026 quarter increased $1.9 billion, or 14%, compared to the March 2025 quarter, primarily due to higher expenses related to refinery sales to third parties, salaries and related costs and aircraft fuel costs. Total operating expense, adjusted (a non-GAAP financial measure, which primarily excludes expenses related to refinery sales to third parties) in the March 2026 quarter increased $1.2 billion, or 9%, compared to the March 2025 quarter.
Our total operating cost per available seat mile ("CASM") increased 13% compared to the March 2025 quarter, while non-fuel unit cost ("CASM-Ex", a non-GAAP financial measure) increased 6%.
Non-Operating Results. Total non-operating expense was $715 million in the March 2026 quarter, compared to $249 million in the March 2025 quarter, primarily due to larger mark-to-market losses on certain of our equity investments in the March 2026 quarter compared to the March 2025 quarter.
Cash Flow. Our cash, cash equivalents, short-term investments and aggregate undrawn principal amount available under our revolving credit facilities ("liquidity") as of March 31, 2026 was $8.1 billion.
During the March 2026 quarter, operating activities generated $2.4 billion, primarily from ticket sales and the sale of SkyMiles to our partners. Remuneration from American Express was $2.2 billion in the March 2026 quarter.
Cash flows used in investing activities during the quarter totaled $1.3 billion primarily from capital expenditures. These operating and investing activities yielded free cash flow (a non-GAAP financial measure) of $1.2 billion in the March 2026 quarter. Additionally, we had cash outflows of $1.6 billion related to repayments of our debt and finance leases and proceeds from debt issuance of $1.3 billion.
The non-GAAP financial measures referenced above for total revenue, adjusted, operating expense, adjusted, CASM-Ex and free cash flow are defined and reconciled in "Supplemental Information" below.
Delta Air Lines, Inc. | March 2026 Form 10-Q | 16 | ||||||
Item 2. MD&A - Results of Operations
Results of Operations - Three Months Ended March 31, 2026 and 2025
Total Operating Revenue
Three Months Ended March 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||
(in millions)(1) | 2026 | 2025 | |||||||||||||||||
| Ticket - Main cabin | $ | 5,404 | $ | 5,361 | $ | 43 | 1 | % | |||||||||||
| Ticket - Premium products | 5,363 | 4,707 | 656 | 14 | % | ||||||||||||||
| Loyalty travel awards | 1,029 | 940 | 89 | 9 | % | ||||||||||||||
| Travel-related services | 506 | 472 | 34 | 7 | % | ||||||||||||||
| Total passenger revenue | $ | 12,302 | $ | 11,480 | $ | 822 | 7 | % | |||||||||||
| Cargo | 226 | 208 | 18 | 9 | % | ||||||||||||||
| Other | 3,326 | 2,352 | 974 | 41 | % | ||||||||||||||
| Total operating revenue | $ | 15,854 | $ | 14,040 | $ | 1,814 | 13 | % | |||||||||||
| TRASM (cents) | 22.92 | ¢ | 20.53 | ¢ | 2.39 | ¢ | 12 | % | |||||||||||
Third-party refinery sales | (2.39) | (1.55) | (0.84) | 54 | % | ||||||||||||||
TRASM, adjusted(2) | 20.53 | ¢ | 18.97 | ¢ | 1.56 | ¢ | 8 | % | |||||||||||
(1)Total amounts in the table above may not calculate exactly due to rounding.
(2)Total revenue per available seat mile ("TRASM"), adjusted is a non-GAAP financial measure. For additional information on adjustments to TRASM, see "Supplemental Information" below.
Compared to the March 2025 quarter, total revenue increased $1.8 billion, due to an increase from premium products, particularly from corporate customers, loyalty travel awards, refinery sales to third parties and growth in our MRO business.
Passenger Revenue by Geographic Region
Increase (Decrease) vs. Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||
| (in millions) | Three Months Ended March 31, 2026 | Passenger Revenue | RPMs (Traffic) | ASMs (Capacity) | Passenger Mile Yield | PRASM | Load Factor | |||||||||||||||||||
| Domestic | $ | 8,717 | 8 | % | 2 | % | 1 | % | 6 | % | 6 | % | — | pts | ||||||||||||
| Atlantic | 1,517 | 11 | % | 4 | % | 3 | % | 6 | % | 7 | % | 1 | pt | |||||||||||||
| Latin America | 1,328 | — | % | (4) | % | (3) | % | 4 | % | 3 | % | (1) | pt | |||||||||||||
| Pacific | 740 | 10 | % | 5 | % | 3 | % | 4 | % | 6 | % | 1 | pt | |||||||||||||
| Total | $ | 12,302 | 7 | % | 1 | % | 1 | % | 6 | % | 6 | % | — | pts | ||||||||||||
Domestic
Domestic passenger revenue increased 8% in the March 2026 quarter compared to the March 2025 quarter on a 1% increase in capacity. Domestic revenue increased due to strong demand for our premium products, particularly from corporate customers.
International
International passenger revenue for the March 2026 quarter increased 5% compared to the March 2025 quarter. The increase in the Atlantic region is primarily driven by demand for premium products. Revenue in the Latin America region remained consistent with the prior period due to demand strength to the Caribbean and South America, which was offset by lower Mexican leisure demand due to civil unrest in several of our destinations. Pacific region revenue growth reflects continued growth in South Korea alongside our joint venture partner Korean Air and strong results on increased China capacity.
Delta Air Lines, Inc. | March 2026 Form 10-Q | 17 | ||||||
Item 2. MD&A - Results of Operations
Other Revenue
Three Months Ended March 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||
| Refinery | $ | 1,654 | $ | 1,062 | $ | 592 | 56 | % | |||||||||||
| Loyalty and related | 1,221 | 1,082 | 139 | 13 | % | ||||||||||||||
| MRO | 380 | 151 | 229 | 152 | % | ||||||||||||||
| Miscellaneous | 71 | 57 | 14 | 25 | % | ||||||||||||||
| Other revenue | $ | 3,326 | $ | 2,352 | $ | 974 | 41 | % | |||||||||||
Refinery. Refinery sales to third parties increased $592 million compared to the March 2025 quarter. See "Refinery Segment" below for additional details on the refinery's operations, including third party refinery sales.
Loyalty and Related. This primarily relates to revenues from brand usage by third parties embedded in miles sold. Loyalty and related also includes the redemption of miles for non-travel awards, our vacation package operations, lounge access (including access provided to certain American Express cardholders) and travel products (e.g., car rentals or hotels booked with our commercial partners). Most of the increase compared to the prior period is driven by higher customer spend on American Express cards.
MRO. This represents revenue from our Delta TechOps third-party maintenance, repair and overhaul ("MRO") business. The increase compared to the prior period resulted from larger engine work scopes and from timing in the current period. We expect continued growth throughout 2026, but at a more normalized rate than we experienced in the March 2026 quarter.
Miscellaneous. This is primarily composed of revenues related to codeshare agreements and international joint venture partnership contractual settlements.
Delta Air Lines, Inc. | March 2026 Form 10-Q | 18 | ||||||
Item 2. MD&A - Results of Operations
Operating Expense
Three Months Ended March 31, | Increase (Decrease) | % Increase (Decrease) | |||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||
| Salaries and related costs | $ | 4,541 | $ | 4,083 | $ | 458 | 11 | % | |||||||||||
| Aircraft fuel and related taxes | 2,742 | 2,410 | 332 | 14 | % | ||||||||||||||
| Refinery expense | 1,654 | 1,062 | 592 | 56 | % | ||||||||||||||
| Contracted services | 1,190 | 1,121 | 69 | 6 | % | ||||||||||||||
| Landing fees and other rents | 913 | 851 | 62 | 7 | % | ||||||||||||||
| Aircraft maintenance materials and outside repairs | 709 | 646 | 63 | 10 | % | ||||||||||||||
| Regional carrier expense | 649 | 613 | 36 | 6 | % | ||||||||||||||
| Depreciation and amortization | 635 | 607 | 28 | 5 | % | ||||||||||||||
| Passenger commissions and other selling expenses | 590 | 552 | 38 | 7 | % | ||||||||||||||
| Passenger service | 428 | 430 | (2) | — | % | ||||||||||||||
| MRO expense | 328 | 140 | 188 | 134 | % | ||||||||||||||
| Profit sharing | 165 | 124 | 41 | 33 | % | ||||||||||||||
| Aircraft rent | 143 | 137 | 6 | 4 | % | ||||||||||||||
| Other | 666 | 695 | (29) | (4) | % | ||||||||||||||
| Total operating expense | $ | 15,353 | $ | 13,471 | $ | 1,882 | 14 | % | |||||||||||
Salaries and Related Costs. The increase in salaries and related costs primarily resulted from the implementation of base pay increases for eligible employees of 4% effective June 1, 2025 and 4% for Delta pilots on January 1, 2026, as well as higher flight crew costs driven by severe weather-related operational disruptions.
Aircraft Fuel and Related Taxes. Aircraft fuel and related taxes increased $332 million compared to the March 2025 quarter primarily due to a 10% increase in our jet fuel purchase price, mainly due to increases during the month of March, and an increase in consumption consistent with the 1% increase in capacity. We expect that fuel consumption for the remainder of 2026 will remain aligned with capacity changes compared to 2025. We expect this elevated jet fuel cost to continue until recent market disruptions and geopolitical events are resolved.
Refinery Expense. This includes expenses associated with refinery sales to third parties. See "Refinery Segment" below for additional details on the refinery's operations.
MRO Expense. This represents expenses from our Delta TechOps third-party MRO business. The increase compared to the prior period resulted from larger engine work scopes and from timing in the current period. We expect continued growth throughout 2026, but at a more normalized rate than we experienced in the March 2026 quarter.
Non-Operating Results
Three Months Ended March 31, | Favorable (Unfavorable) | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||
| Interest expense, net | $ | (151) | $ | (179) | $ | 28 | |||||||||||||||
| Gain/(loss) on investments, net | (550) | (40) | (510) | ||||||||||||||||||
| Loss on extinguishment of debt | (4) | — | (4) | ||||||||||||||||||
| Miscellaneous, net | (10) | (30) | 20 | ||||||||||||||||||
| Total non-operating expense, net | $ | (715) | $ | (249) | $ | (466) | |||||||||||||||
Interest expense, net. Interest expense, net includes interest expense and interest income. This decreased compared to the prior year primarily due to reduced interest expense resulting from our debt reduction initiatives. During 2025, we reduced our debt and finance lease obligations by approximately $2.0 billion. We have continued to pay down our debt during the March 2026 quarter with $1.6 billion of payments on debt and finance lease obligations, of which $1.2 billion was early repayments enabled by refinancings with lower interest rates.
Delta Air Lines, Inc. | March 2026 Form 10-Q | 19 | ||||||
Item 2. MD&A - Non-Operating Results
Loss on investments, net. Changes in the valuation of investments accounted for at fair value are recorded in gain/(loss) on investments, net and are driven by changes in stock prices, foreign currency fluctuations and other valuation techniques for investments in certain companies, particularly those without publicly-traded shares. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for additional information on our equity investments measured at fair value on a recurring basis.
Loss on extinguishment of debt. Loss on extinguishment of debt reflects the losses incurred in the early repayment of certain loans and notes.
Miscellaneous, net. Miscellaneous, net primarily includes employee benefit plans net periodic benefit/(cost), charitable contributions, our share of our equity method investments' results, dividends received from our equity investees and foreign exchange gains/(losses).
Income Taxes
In certain periods, we may have adjustments to our net deferred tax liabilities as a result of changes in prior year estimates, the valuation allowance on mark-to-market adjustments on our equity investments, and tax laws enacted during the period, which will impact the effective tax rate for that period. Excluding mark-to-market adjustments on equity investments recognized in the March 2026 quarter, we project our annual effective tax rate for 2026 will be 23% to 25%.
Refinery Segment
The refinery operated by Monroe primarily produces gasoline, diesel and jet fuel and operates for the benefit of the airline segment by providing jet fuel to the airline. Monroe sells or exchanges its non-jet fuel production to third parties, which enables us to procure additional jet fuel for consumption in our airline operations. The refinery typically produces approximately 200,000 barrels of refined products per day, which represents approximately 75% of our daily consumption, and it regularly optimizes the mix of its sales and exchange activities based on market conditions. Certain contracts to exchange non-jet fuel products ended during the second half of 2025, which contributed to the increase in third party refinery sales compared to the March 2025 quarter. Third party refinery sales also increased due to higher market prices for refined products.
The refinery generated an operating loss of $39 million in the March 2026 quarter compared to a loss of $1 million in the March 2025 quarter. The loss in the March 2026 quarter primarily results from the recognition of settlement losses on fuel hedge contracts related to inventory that is expected to be sold in the future, which was partially offset by higher industry refining margins.
For more information regarding the refinery's results, see Note 9 of the Notes to the Condensed Consolidated Financial Statements.
| Refinery segment financial information | ||||||||||||||||||||||
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||
| (in millions) | 2026 | 2025 | ||||||||||||||||||||
| Third party refinery sales | $ | 1,654 | $ | 1,062 | $ | 592 | ||||||||||||||||
| Sales to airline segment and other | 384 | 636 | (252) | |||||||||||||||||||
| Operating revenue | $ | 2,038 | $ | 1,698 | $ | 340 | ||||||||||||||||
| Operating loss | $ | (39) | $ | (1) | $ | (38) | ||||||||||||||||
Delta Air Lines, Inc. | March 2026 Form 10-Q | 20 | ||||||
Item 2. MD&A - Operating Statistics
Operating Statistics
Three Months Ended March 31, | % Increase (Decrease) | ||||||||||||||||||||||||||||
Consolidated(1) | 2026 | 2025 | |||||||||||||||||||||||||||
| Revenue passenger miles (in millions) ("RPM") | 56,470 | 55,678 | 1 | % | |||||||||||||||||||||||||
| Available seat miles (in millions) ("ASM") | 69,163 | 68,401 | 1 | % | |||||||||||||||||||||||||
| Passenger mile yield | 21.78 | ¢ | 20.62 | ¢ | 6 | % | |||||||||||||||||||||||
| Passenger revenue per available seat mile ("PRASM") | 17.79 | ¢ | 16.78 | ¢ | 6 | % | |||||||||||||||||||||||
| Total revenue per available seat mile ("TRASM") | 22.92 | ¢ | 20.53 | ¢ | 12 | % | |||||||||||||||||||||||
TRASM, adjusted(2) | 20.53 | ¢ | 18.97 | ¢ | 8.2 | % | |||||||||||||||||||||||
| Cost per available seat mile ("CASM") | 22.20 | ¢ | 19.69 | ¢ | 13 | % | |||||||||||||||||||||||
CASM-Ex(2) | 15.13 | ¢ | 14.23 | ¢ | 6 | % | |||||||||||||||||||||||
| Passenger load factor | 81.6 | % | 81.4 | % | — | pts | |||||||||||||||||||||||
| Fuel gallons consumed (in millions) | 988 | 976 | 1 | % | |||||||||||||||||||||||||
Average price per fuel gallon(3) | $ | 2.78 | $ | 2.47 | 12 | % | |||||||||||||||||||||||
Average price per fuel gallon, adjusted(2)(3) | $ | 2.62 | $ | 2.45 | 7 | % | |||||||||||||||||||||||
(1)Includes the operations of our regional carriers under capacity purchase agreements.
(2)Non-GAAP financial measures defined and reconciled to TRASM, CASM and average fuel price per gallon, respectively, in "Supplemental Information" below.
(3)Includes the impact of fuel hedge activity and refinery segment results.
Delta Air Lines, Inc. | March 2026 Form 10-Q | 21 | ||||||
Item 2. MD&A - Fleet Information
Fleet Information
Our operating aircraft fleet, purchase commitments and options at March 31, 2026 are summarized in the following table.
| Mainline aircraft information by fleet type | ||||||||||||||||||||||||||
Current Fleet(1) | Commitments | |||||||||||||||||||||||||
| Fleet Type | Owned | Finance Lease | Operating Lease | Total | Average Age (Years) | Purchase | Options | |||||||||||||||||||
| A220-100 | 45 | — | — | 45 | 6.3 | |||||||||||||||||||||
| A220-300 | 38 | — | — | 38 | 2.8 | 62 | ||||||||||||||||||||
| A319-100 | 57 | — | — | 57 | 24.1 | |||||||||||||||||||||
| A320-200 | 46 | — | — | 46 | 29.3 | |||||||||||||||||||||
| A321-200 | 77 | 8 | 42 | 127 | 7.3 | |||||||||||||||||||||
| A321-200neo | 93 | |||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-27 | BELLEMARE ALAIN | EVP & Pres. - International | Sell | -25,000 | $81.44 | -$2,036,000 |
| 2026-05-27 | Ausband Allison C | EVP & Chief People Officer | Sell | -5,000 | $80.90 | -$404,500 |
| 2026-05-26 | Ausband Allison C | EVP & Chief People Officer | Sell | -5,000 | $79.00 | -$395,000 |
| 2026-05-22 | Ausband Allison C | EVP & Chief People Officer | Sell | -9,710 | $76.00 | -$737,960 |
| 2026-05-21 | Ausband Allison C | EVP & Chief People Officer | Sell | -5,000 | $73.50 | -$367,500 |
| 2026-05-07 | BELLEMARE ALAIN | EVP & Pres. - International | Sell | -20,621 | $72.75 | -$1,500,198 |
| 2026-04-14 | Laughter John E | EVP & Chief of Operations | Sell | -15,000 | $71.61 | -$1,074,090 |
| 2026-04-10 | Laughter John E | EVP & Chief of Operations | Sell | -69,304 | $68.15 | -$4,722,929 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-09 10-Q expected by 2026-08-08 (in 28 days)
- ~2026-10-08 10-Q expected by 2026-11-07 (in 119 days)
- ~2027-02-11 10-K expected by 2027-03-01 (in 245 days)
- ~2027-04-07 10-Q expected by 2027-05-07 (in 300 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-24 DEF 14A Proxy Statement
- 2026-04-08 10-Q Quarterly Report
- 2026-04-08 8-K Earnings Release; Financial Statements and Exhibits
- 2026-03-05 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-02-13 8-K Officer/Director Change
- 2026-02-11 10-K Annual Report
- 2026-01-27 8-K Material Agreement Entered
- 2026-01-13 8-K Material Agreement Entered; Earnings Release; Financial Statements and Exhibits
- 2025-12-17 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-10-09 10-Q Quarterly Report
- 2025-10-09 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-30 8-K Material Agreement Entered; Material Financial Obligation
- 2025-07-10 10-Q Quarterly Report
- 2025-07-10 8-K Earnings Release; Financial Statements and Exhibits
- 2025-06-20 8-K Officer/Director Change; Shareholder Vote Results