US Airlines Rally on Delta's Positive Earnings Report

US airline stocks surge after Delta's Q2 earnings top estimates and reinstates its forecast, boosting hopes for the sector. American Airlines, United Airlines, and Southwest Airlines shares rise by 11% or more, while Alaska Air shares jump over 8%. Delta reported stabilized bookings, up 5% YoY premium ticket revenue, and 8% YoY loyalty program revenue. United, American, and Alaska Airlines are set to report earnings, with analysts expecting above-street forecasts.

US airline stocks have surged following Delta Air Lines' strong Q2 earnings report and the reinstatement of its full-year forecast, fueling optimism across the sector. The news has sparked a rally in shares of American Airlines, United Airlines, and Southwest Airlines, with Delta's peers benefiting from the carrier's bullish outlook.

Delta Air Lines reported a non-adjusted net profit of $2.1 billion for the second quarter, up 63% year-over-year [1]. The airline's operating revenue stood at $16.6 billion, while operating costs increased by only 1% year-over-year to $14.5 billion. This resulted in an operating profit of $2.1 billion and a non-adjusted net profit of $2.13 billion. The adjusted net profit, after accounting for third-party refinery sales and gains/losses on investments, was $1.3 billion, a 10% decrease from the previous year.

The airline's President, Glen Hauenstein, noted that demand levels had stabilized during the quarter and were flat compared to the same period a year prior. The resilience of Delta's diverse and high-margin revenue streams has allowed the carrier to maintain profitability during times of economic uncertainty [1]. Delta's premium products and loyalty program revenues saw significant growth, with premium ticket revenue up 5% year-over-year and loyalty program revenue increasing by 8% [1].

Delta's strong performance has boosted investor confidence in the broader airline sector. American Airlines, United Airlines, and Southwest Airlines shares have seen significant gains, with American Airlines and United Airlines shares rising by 11.7% and 6.05% respectively, while Southwest Airlines shares have increased by more than 8% [2]. The positive sentiment is expected to continue as these airlines prepare to report their own earnings, with analysts anticipating above-street forecasts.

The market's optimism is also reflected in the improved financial metrics of Delta's competitors. United Airlines, for instance, boasts a strong growth score of 99.38 and a solid value score of 76.02, indicating its potential for continued performance and reasonable pricing [2]. American Airlines, on the other hand, has a respectable growth score of 69.72 but a lower momentum score of 20.61, suggesting a lack of recent price movement [2].

Alaska Air Group (ALK) is expected to report a year-over-year decline in earnings on higher revenues when it releases its results for the quarter ended June 2025. However, the stock might see a price increase if the actual results exceed analyst expectations [3].

The resurgence of Delta Air Lines has set a positive tone for the US airline industry, with investors hopeful that the sector's performance will continue to improve. As Delta and its peers prepare to report their earnings, the market will closely monitor their performance to gauge the sector's overall health and future prospects.

References:
[1] https://simpleflying.com/delta-net-profit-economic-headwinds/
[2] https://www.benzinga.com/trading-ideas/movers/25/07/46344382/united-airlines-american-airlines-stocks-rise-on-deltas-bullish-forecast
[3] https://finance.yahoo.com/news/alaska-air-group-alk-expected-140004853.html