Delta’s Third-Quarter Earnings Fly High; Profit Margin Remains Solid Amid Robust Travel Demand

We’ve maintained our $57 per share fair value estimate for shares of Delta Air Lines following the firm’s third-quarter earnings release. It was a strong quarter for the no-moat-rated airline with total revenue of nearly $14 billion (approximately 11% higher than third-quarter 2019) and an 11.6% adjusted operating margin (the firm’s second consecutive quarter with a double-digit operating margin). Delta achieved these results despite less capacity and much higher fuel prices compared with the third quarter of 2019 (available seat miles were 17% lower and average fuel price per gallon was a whopping 80% higher).