It’s a brave call in the second week of the year and you have to admire the confidence as Delta Air Lines predicts that 2025 could be their best-ever financial year, although there are only fifty-one more weeks to go! But they may have a point! What does the data say?
Building on the first quarter capacity data we shared last week we’ve looked at Delta’s current average selling fares in the domestic market, comparing them to Q1 2024, and certainly for Delta the picture does look pretty good.
On the chart below we have plotted both airline capacity and airfare changes. And to say the least, the current DL position looks very strong with a 4% capacity growth lining up against an improvement in selling fares of 14%, a quite remarkable set of numbers. Since the data is the freshest on the market and based upon millions of records it’s certainly looking good and not surprising that their stock price rose sharply on Friday.
With the notable exception of American Airlines, it looks like all of the US majors have some solid increases in average selling fares. What looks like a 13% reduction in average fares and a slight increase in capacity doesn’t bode well for American, an airline under pressure after recent results. For Spirit Airlines the 15% reduction in capacity alongside a 10% increase in average selling fares is likely to lead to less revenue unless they can really push ancillary revenues. However, if their costs drop then these two numbers may buy them some time as they reset the network.
It’s early days in 2025 but some indicators suggest that the winners of Q1 2025 in the US airline financial stakes are likely to be very near the top of the list at the end of 2025. Can those mid-market large airlines capture any ground? It should be interesting to see, we will circle back in early April.
