Travelers Are Buying Into Delta’s ‘Premium’ Push—And the Airline’s Stock Is Rising
Key Takeaways
Delta Air Lines (
DAL
) bills itself as the “premium” U.S. airline. Passengers appear to be buying in.
With customers increasingly paying for seats at the front of the plane, leaving
upgrades in short supply
, Delta reported record
fourth-quarter revenue
and operating profit on Friday.
Delta hammered home the “premium” messaging in its report, using the word 11 times. But there is substance behind it: While main cabin ticket sales rose 2% year-over-year in Q4, “premium products” ticket revenue surged 8%. For the year, main cabin sales were essentially flat at a tick below $25 billion, while premium revenue was up 8% to $20.6 billion.
Consumers are “increasingly seeking the premium products and experiences that Delta provides,”
CEO
Ed Bastian said.
Shares of Delta soared 10% in recent trading, among the biggest gainers in the
S&P 500
on a day when the index is down 1.5%.
Delta ‘Profit Sharing Day’ Coming Next Month
All this newfound “premium” profit may lead to a lucrative Valentine’s Day for Delta employees.
Delta said Friday that on its next “Profit Sharing Day”—Feb. 14, or Valentine’s Day—eligible employees “will receive an estimated payout of 10% of their eligible earnings, representing an average five weeks in additional pay.” That amounts to a cumulative $1.4 billion as their share of Delta’s 2024 profits, it said.
The company has given out more than $10 billion in profit sharing over the past 10 years, Delta said.
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