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Latest financial results indicate a positive outlook for Delta and United

The latest financial results published by two of the ‘big four’ US carriers indicate a positive outlook moving into 2023.

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Delta Air Lines reports good results and a positive financial outlook

Delta Air Lines have reported a good set of results, with financial year adjusted revenues of $45.6 billion (just 2% below FY19) and operating profit of $3.6 billion (7.8% margin). This is positive, though still some way below the $6.6 billion (with a 14.2% margin) achieved in FY19.


Capacity was 15% below 2019 levels, with the load factor 2 points lower at 84%. Unit revenue (TRASM) was very strong at 15% above 2019 levels, but offset by unit costs (CASM) up to 18% higher. This was mainly due to higher fuel costs.


Net profit was $1.9 billion compared to $4.7 billion in FY19 reflecting the lower margin and a significantly higher net interest expense. Net debt was $22.3 billion more than double the $10.5 billion in December 2019. Delta paid down $4.5 billion of gross debt during 2022 and expects to deliver free cash flow of more than $2 billion in 2023 and further reduce debt.


Q4 (Oct-Dec) showed continuing momentum with and EBIT margin of 11.6%, very close to the 12.5% achieved in Q4 19. The company is guiding to Q1 23 revenue 14-17% higher than Q1 19 with an EBIT margin of 4%-6%. FY 2023 EBIT margin is expected to be 10%-12%, still a little below 2019 levels (14.2%).

United Airlines reports Q4 EBIT margin above Q4 2019 level

United Airlines reported slightly weaker results than Delta, but also showed an improving overall trend. Financial year revenue was up by 3.9% on FY19 at $44.9 billion, with an operating profit of $2.3 billion (5.2% margin) compared to $4.3 billion (10% margin) in FY19. Capacity (ASM) was 13% below 2019 levels, with passenger load factor 83.4% just 0.6 points below 2019. Unit revenue (TRASM) was very strong, 19.5% higher than FY19 but this was offset by unit costs (CASM) 25.7% higher.


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Net profit came in at just $737 million, compared to $3 billion in FY19 - reflecting the lower operating profit and a $900 million increase in net interest expense. Net debt was $20 billion with a net debt/EBITDA (adj.) of 4.0x, which is comfortable.


Q4 22 was strong with an 11.2% adj. EBIT margin, despite the operational disruption from extreme weather, higher than the 7.9% achieved in Q4 19. The company remains confident of its 9% pre-tax margin target for 2023.


The IBA team monitor and report on all major airline results globally. Follow us on LinkedIn and subscribe to our newsletter for the latest intelligence.


IBA provides aviation consultancy services for clients in all parts of the aviation value chain including the manufacturers (OEMs), the operators (airlines, airports, MROs) and the finance community (lessors, banks, investors).


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