Delta Expects Strong Corporate Demand, 20% Growth in 2026

Delta Air Lines is projecting roughly 20% earnings growth in 2026, fueled primarily by sustained demand from higher-income and corporate travelers, even as pressure persists in lower-priced segments. The Atlanta-based carrier reinforced its premium-led strategy with an order for 30 Boeing 787-10 widebody aircraft, plus options for 30 more, underscoring its long-term focus on international routes and higher-yield capacity.

Chief Executive Ed Bastian said the airline’s performance reflects a growing divergence in US consumer behavior. “The strength in the consumer sector is at the higher end of the curve,” Bastian said. “The lower-end consumer is struggling. We fortunately do not live there.” Executives characterized the trend as a K-shaped economy, with affluent consumers continuing to spend while price-sensitive travelers scale back.

Premium cabins, loyalty programs, and non-ticket revenue streams now account for nearly 60% of Delta’s total revenue, supported by strong demand for international travel and co-branded credit cards through its American Express partnership. That mix has helped protect margins as domestic leisure travel and main-cabin demand soften.

After a slow start in 2025, US air travel regained momentum later in the year. Passenger volumes rose sharply after Thanksgiving, ending the year above 2024 levels. Growth was evident across domestic, international, leisure, and business segments, with forecasts pointing to continued strength, particularly at international and corporate-focused hubs.

Delta reported a 1% increase in overall passenger revenue in December compared with a year earlier, despite a 7% decline in main-cabin ticket revenue. Revenue from premium products rose 9%. Executives said nearly all planned capacity growth will be directed toward premium seating, with new aircraft configured to increase the share of higher-yield cabins.

For 2026, Delta expects adjusted earnings of US$6.50 to US$7.50 per share and free cash flow of US$3 billion to US$4 billion. For the March quarter, the airline forecast revenue growth of 5% to 7% and adjusted earnings of US$0.50 to US$0.90 per share. Analysts polled by LSEG expect full-year earnings of US$7.25 per share and US$0.72 for the quarter. Delta shares fell nearly 3% on Jan. 13 after the midpoint of its outlook fell short of expectations.

Delta’s premium-focused approach contrasts sharply with conditions facing low-cost and ultra-low-cost carriers, many of which remain exposed to budget-conscious travelers. Profitability challenges and excess capacity have accelerated consolidation, with Allegiant announcing plans to acquire Sun Country Airlines and Spirit Airlines entering a second bankruptcy process.

Bastian described the airline's outlook as “upbeat,” citing strong booking trends, while acknowledging risks tied to geopolitics and policy uncertainty. Executives said a recovery in main-cabin demand would be necessary to reach the upper end of guidance, reinforcing that Delta’s near-term growth remains anchored in premium demand and long-haul travel.

Across the US airline industry, carriers are increasingly  reconfiguring fleets to expand premium offerings. American Airlines is investing in higher-end seating, onboard amenities, and loyalty programs to narrow a profitability gap with Delta and United Airlines, deploying new aircraft such as the Boeing 787-9 and Airbus A321XLR alongside upgrades to existing fleets and digital platforms.