DELTA AIR LINES, INC.

• Total operating revenue increased 12.9% YoY to $15.9B, with passenger revenue up 7.2% to $12.3B, led by premium products and corporate demand.
• Operating income declined 12.0% to $501M, as operating expenses rose 14.0% to $15.4B, driven by higher salaries, fuel, and refinery costs.
• Net loss of $289M compared to net income of $240M in prior year, primarily due to $550M loss on investments (vs. $40M loss in Q1 2025).
• Operating cash flow of $2.4B and free cash flow of $1.2B supported debt reduction of $1.6B and dividend payments of $129M.

Profitability

• Operating margin contracted to 3.2% from 4.1% YoY, as total operating expense increased 14.0% to $15,353M.
• Net margin turned negative at -1.8% vs. 1.7% prior year, impacted by non-operating losses on equity investments.
• Adjusted total revenue (excluding third-party refinery sales) rose 9.4% to $14,200M, while adjusted operating expense rose 9.3% to $13,549M.

Cash flow

• Operating cash flow of $2,432M was supported by advance ticket sales and $2.2B in remuneration from American Express.
• Investing cash outflow of $1,263M primarily for aircraft and ground equipment ($1,200M capex).
• Financing cash outflow of $435M included $1,564M debt repayments, partially offset by $1,250M proceeds from a new term loan.

Balance sheet

• Cash and equivalents increased to $5,053M from $4,310M at year-end 2025.
• Total debt (including current maturities) was $13,235M, down from $13,308M at year-end; long-term debt reduced to $10,608M.
• Working capital deficit widened to -$19,036M from -$16,656M, with current ratio at 0.42x vs. 0.40x.

Themes

• Premium product and corporate demand drove passenger revenue growth, with ticket revenue for premium products up 14%.
• Refinery segment loss widened to $39M due to settlement losses on fuel hedges, partially offset by higher industry refining margins.
• Debt reduction remains a priority, with $1.6B in repayments during the quarter, including early repayments enabled by refinancings.
• MRO business revenue surged 152% to $380M on larger engine work scopes; growth expected to normalize.

Capital allocation

• Capital expenditures of $1.2B in Q1; full-year 2026 capex expected at approximately $5.5B, primarily for aircraft and fleet modifications.
• Quarterly dividend of $0.1875 per share paid, totaling $129M; $1.0B share repurchase program authorized through June 2028, with no repurchases yet.
• New aircraft orders: 30 Boeing 787-10s, 16 A330-900s, 15 A350-900s, and exercised options for 34 A321neos.

Shareholder returns

• Quarterly dividend of $0.1875 per share ($129M total) paid in March 2026.
• $1.0B share repurchase program authorized, no shares repurchased to date.

Drivers

• Continued premium product and corporate demand strength.
• Elevated jet fuel costs expected to persist until geopolitical disruptions resolve.
• MRO growth expected to continue at a more normalized rate.

Watch items

• Fuel price volatility and hedge settlement impacts on refinery segment.
• Investment portfolio mark-to-market losses (e.g., $550M loss in Q1).
• Capacity growth and cost control (CASM-Ex up 6% YoY).

Inflections

• Not disclosed—only two periods (Q1 2026 and Q1 2025) presented in this 10-Q.

Prior-period comparison

• Revenue growth accelerated to 12.9% from prior year's undisclosed growth rate, driven by premium products and refinery sales.
• Profitability swung to a net loss due to non-operating investment losses, contrasting with prior year's net income.