What's going on?

Delta Air Lines is gearing up for brighter skies.

What does this mean?

Delta’s last quarter was more turbulence than smooth sailing, with fluctuating fuel prices and flight-grounding storms racking up a worse-than-expected $363 million loss for the airline. Add to that a new pilot�s contract including raises of 34%, and you’d expect Delta to be hitting the panic button. But the airline�s actually optimistic about the future: after all, it typically rakes in the majority of its revenue during the bustling spring and summer travel season, and international demand is currently flying high. In fact, Delta�s already experiencing a surge of momentum, citing record bookings for the summer and boasting ten of the highest sales days in its history last month. That might be why the airline forecast better-than-expected revenue and profit for this quarter, sending stock skyward.

Why should I care?

Zooming in: Going up in the world.
Consumer demand could still falter if a recession hits, but Delta’s staying positive. See, the firm’s got a backup plan in case adversity strikes: doubling down on premium travel offerings. The thinking is that an economic nosedive might clip the wings of budget-conscious coach passengers, but it�ll be barely noticed by well-heeled jet-setters (who are a whole lot more profitable for airlines anyway). The upshot: every day this year, Delta�s planning to offer 15,000 more premium seats than it did in pre-pandemic times � including premium options on each flight from this summer onward.

For markets: Crash landing.
Airline stocks kicked off the year strong, but concerns that demand could fizzle out have investors biting their nails. Add in the recent oil price spike following the OPEC meeting earlier this month � which could further hike fuel costs � as well as the industry’s lingering debt burden, and it�s no wonder sentiment has reversed. In fact, investor bets against the industry are now at their highest since Covid struck.