Travelers Are Buying Into Delta’s ‘Premium’ Push—And the Airline’s Stock Is Rising

What you need to know

• Delta Air Lines bills itself as the "premium" U.S. airline. It appears that passengers are buying into the hype.
• On Friday, the carrier reported record revenue and profits for its fourth quarter.
• Delta announced that on its "Profit Sharing Day"—Feb. 14, or Valentine's Day—eligible employees "will receive an estimated payout of 10% of their eligible earnings, representing an average five weeks in additional pay."

Delta Air Lines is a carrier that bills itself as one of the most reliable airlines in the world. “premium” U.S. airline. The passengers seem to have bought in.

Delta’s fourth quarter revenue and profit were record-breaking on Friday, as customers are increasingly choosing to pay for front seats, leading to a shortage of upgrades.

Delta hammered home the "premium" messaging in its report, using the word 11 times. But there is substance behind it: While main cabin ticket sales rose 2% year-over-year in Q4, "premium products" ticket revenue surged 8%. The main cabin’s sales for 2018 were basically flat with a little under $25 billion. However, premium revenues went up by 8% in the same period to reach $20.6 billion.

The Consumers Are “increasingly seeking the premium products and experiences that Delta provides,” Ed Bastian is the CEO at Ed Bastian.

Shares of Delta soared 10% in recent trading, among the biggest gainers in the S&P 500 on a day when the index is down 1.5%.

Delta 'Profit Sharing Day' Coming Next Month

All this newfound "premium" profit may lead to a lucrative Valentine's Day for Delta employees.

Delta said Friday that on its next "Profit Sharing Day"—Feb. 14, or Valentine's Day—eligible employees "will receive an estimated payout of 10% of their eligible earnings, representing an average five weeks in additional pay." That amounts to a cumulative $1.4 billion as their share of Delta's 2024 profits, it said.

Delta has said the company has distributed over $1 billion worth of profit sharing in the past decade.

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