Delta Air Lines started the latest airline earnings season with disappointing news, revealing that it expects to miss Wall Street estimates for profit and revenue in the third quarter. The company’s second-quarter profit dropped by 29% compared to the previous year. The primary reasons for this decline include heightened competition during the busy summer travel season, which led many airlines to reduce ticket prices to remain competitive. Additionally, Delta is facing increased costs, including an extra $500 million annually on labor after raising employee wages in early June.
CEO Ed Bastian highlighted that the Summer Olympics are deterring travelers from visiting Paris, one of Delta’s key destinations, resulting in an anticipated $100 million revenue loss. Despite these challenges, Delta announced a strategic partnership with Riyadh Air, positioning it as the only U.S. airline likely to fly to Saudi Arabia. Furthermore, Delta recently unveiled a new upscale lounge at New York’s JFK International Airport, aiming to attract more luxury travelers.
