Delta Air Lines (DAL) -) posted record earnings and revenue in its second quarter thanks to strong travel demand and lower fuel costs. The airline also lifted its full year forecast, with expectations for robust travel demand into the third quarter. "Consumer demand for air travel remains robust. Against this constructive backdrop, we are increasing our 2023 earnings guidance and reiterating our recently updated outlook for free cash flow," said CEO Ed Bastian.
TheStreet's J.D. Durkin sat down with Citi Analyst and airline expert Steve Trent to discuss Delta's second quarter results.
Full Video Transcript Below:
J.D. DURKIN: So what stood out to you in terms of Delta's report here in terms of their earnings season? We know what consumer spending has looked like and really the desire to travel, especially, I think after people have been stuck home in quarantine for so long. What did we learn specifically from Delta?
STEVE TRENT: Yeah, no, absolutely. And thank you for having me. So I think that if one looks at demand indicators, they continue to look very strong. So you actually have pent up demand, not just in tourism, but I would also say blended travel. There's been a big push into blended travel. I think the other thing that stands out, quite frankly, as an industry issue is what's going on with capacity. You continue to have a dearth of capacity on a per capita basis, and this is something that all else equal is supporting pricing. So when we look at the very strong demand and what's happening with supply, you know, we remain constructive on the space and Delta is our favorite U.S. airline.
J.D. DURKIN: Is it your base case that we can see this type of momentum continue for Delta and other major airline leaders into Q3 and Q4 for the remainder of this year?
STEVE TRENT: Yes, absolutely. So one of the things that I think is fascinating is you're seeing international really starting to spool up so shallow transatlantic think of like New York to London or New York to Paris. You have deep transatlantic, so think Miami to Tel Aviv or Washington, DC to Cairo or something like that. That's just starting to spool up. Same thing is happening on the trans-pacific with the exception of U.S.- China. So I think what we're sitting here one year from now, we're all going to be talking about how good these international long haul corridors look. And when we think about exposure, United Airlines and Delta have the most metal on those long haul corridors.
