Delta forecasts income progress in 2025 because of 'resilient financial system'

A Delta aircraft in the airline's hangar in Atlanta

Leslie Josephs/CNBC

Delta Air Lines said Wednesday that sales would rise in 2025, citing a “resilient economy” for strong travel demand and credit card spending, particularly for upscale offerings. The company also said it expects earnings to increase in the coming years.

Delta forecasts mid-single-digit revenue growth next year compared to 2024, in line with analysts' expectations of around 6% growth.

In an investor day presentation, the airline said it would expand traffic by 3% to 4% next year starting in 2024. Delta also reiterated its fourth-quarter outlook. Longer term, the company expects to grow adjusted earnings by 10% per year over the next three to five years.

Delta is the most profitable U.S. airline and its executives tout their strong partnership with Delta American Express and the high demand for more expensive seats at the front of the plane as part of its success. United Airlineshowever, has made progress in increasing profits and attracting luxury travelers. Shares of Delta are up 60% so far this year through Tuesday's close, while shares of United are up 128%. Both outperform the broader market and other providers.

Delta said just 43% of its revenue this year will come from main cabin tickets, while 57% of that will come from premium seats and its lucrative loyalty program. That's up from 60% of main cabin sales in 2010.

The airline has worked for years to get customers to pay for the first-class seats it had largely given away in recent years.

Delta President Glen Hauenstein told reporters that about 15 years ago, about 12% of Delta's first-class seats were paid and the rest were upgrades for frequent flyers. More than 70% of these seats have now been purchased, including post-booking buyouts. He said the change was initially “traumatic” for some travelers.

Hauenstein said Delta is looking for new ways to segment its cabins after the airline — and its competitors — spent years splitting coach class into options like premium economy, seats with extra legroom and basic economy. Although no details were given, they are also considering more options for travelers sitting at the front of the plane, Hauenstein said.

During the presentation, airline executives may face questions about future demand, cost control and the measures the airline has taken to prevent the massive impact from happening again CrowdStrike Failure last July.