‘We’re Positioned to Win’: Why Delta Expects More Growth in 2025

Skift Take

During Delta’s investor day on Wednesday, executives didn’t reveal too many changes, but were bullish on the airline’s ability to grow due to a strong economy.

Meghna Maharishi

Delta Air Lines said Wednesday it is expecting an increase in sales in 2025, driven by a strong economy and sustained demand for premium and international travel. 

The company expects revenue to grow in the mid-teens, but costs, excluding fuel, would climb in the coming year. 

“We’re positioned to win like never before. This airline, this brand that we’re seeing the momentum is strong and gaining altitude,” said CEO Ed Bastian at the carrier’s investor day. 

Millennials and Wealthier Travelers Drive Delta’s Growth

Bastian said the company is seeing the majority of its growth coming from wealthier travelers. 

“Households with earnings of $100,000 or more make up about 40% of the overall U.S. [economy] and also 75% of overall travel spend,” he said. “And since Delta is a premium traveler, obviously, our numbers are much higher than 75%. I’d say that number is probably closer to 90% of our travel is coming from households in this cohort.” 

He added that Delta is also seeing millennials — those who were born between 1981 and 1996 — account for an increasing share of spending on air travel. 

“The secular growth that we’ve seen in travel is across all generations. This is not only those who are baby boomers that are wanting to go out and had to sit home for a couple of years during COVID and were afraid they’d never get back out and the revenge travel aspect,” Bastian said. “It’s actually happening with millennials more than ever and we have all segments of our marketplace looking for that experience.”

Bastian also pointed to a statistic that millennials are 36% more wealthy than Gen X when they were in the same age range and 20% wealthier than boomers. 

“Millennials not only have the desire more than ever and capability, but they also have the execution,” he said. “They’re the fastest-growing generation, and their travel spend across all generations are growing by three to four points across any other spend category.”

Delta Sees Strength in Premium Products

Premium products have become one of Delta’s most profitable segments, with premium seats and the carrier’s loyalty program generating 57% of its revenue. Main cabin seating now makes up 43% of Delta’s earnings. Nearly 14 years ago, main cabin raked in around 60% of Delta’s revenues. 

Long term, Delta expects premium seating and its loyalty program to make up more than 60% of its revenue. Delta president Glen Hauenstein said the carrier found that 85% of customers sitting in premium seats intend to repurchase such seats. 

“What we’ve garnered from all this now years of experience with these premium products is once people are flying in them, they tend to not go back,” Hauenstein said. “There’s a life cycle. The life cycle starts when you’re young, and fares are the only thing that matters. And then as you get older and and you can afford more, want more, and it’s really been enlightening to unlock this life cycle of a customer and understand them.”

Hauenstein said Delta plans to add more premium seats to some of its planes, such as the A350-900. The carrier expects premium seating ticket revenues to eclipse main cabin by 2027.

An Upbeat Look on President-elect Trump

Bastian told a group of reporters that he believed the incoming Trump administration could be a “breath of fresh air” when it comes to regulations, according to CNBC. 

He continued to say the industry has seen “a level of overreach” in the last four years. The Biden administration has taken a stricter approach to regulation in the airline industry, blocking the JetBlue-Spirit merger and implementing a slate of consumer protection rules like automatic refunds and junk fee disclosures. 

An appeals court temporarily blocked the Biden administration’s junk fee rule after major airlines sued, arguing the rule was a regulatory overreach for the Department of Transportation. 

The DOT is also investigating airlines’ loyalty programs, one of their most lucrative assets. The investigation is focusing on the devaluation of miles, hidden fees, dynamic pricing and reduced competition and choice.