Delta Air Lines lifts outlook on ‘no signs of any let up’ in demand

Delta Air Lines Inc (NYSE: DAL) is in focus today after raising its guidance for the current financial quarter.

Delta Air Lines’ earnings guidance for Q2

The air carrier now forecasts its adjusted per-share earnings to fall between $2.25 to $2.50 in Q2. In an interview with CNBC this morning, CEO Ed Bastian said:

The demand is off the chains. I think the second quarter will be the highest Q2 earnings in our history. We think we’re in a multi-year recovery. There are no signs of any let up.

Delta Air Lines is scheduled to report its second-quarter financial results on July 13^th. At writing, its shares are up about 35% versus the start of the year.

Delta Air Lines raises outlook for free cash flow

Delta Air Lines now expects to earn $6.0 a share (adjusted) this year.

On Tuesday, it also raised its outlook for the full-year free cash flow from $2.0 billion to $3.0 billion. According to the Chief Executive:

We have talked about the shift between goods and services starting to return. We’re still in the middle innings of this shift. I think it’ll take several years before it starts to normalise.

The Atlanta-headquartered firm wants to generate about $10 billion in free cash flow between now and 2025. It resumed quarterly dividend earlier this month.

Is there any further upside in Delta Air Lines stock?

Delta Air Lines also raised its outlook for revenue per available seat mile this year to 18% versus up to 17% it had guided for earlier.

The airline stock is still down nearly 30% versus pre-pandemic. But CEO Bastian said on Tuesday:

Our stock was $6 in 2009. We got to $60 in 2019. We’ve done it before. We’ll do it better this time on strength of the balance sheet, quality of the brand, and investments we’re making in digital.

He’s upbeat also on the trade-ups to more premium seats. Premium revenue is expected to make 35% of the total revenue this year.