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Shares of the company rose 4.45% to $35.20 in early trading.
The company's earnings in the January-March quarter, however,
fell short of Wall Street estimates. Chief Executive Ed Bastian,
in an interview with Reuters, said fuel price volatility and bad
weather affected the company's performance in the quarter.
Bastian remained upbeat about consumer demand despite growing
risks of an economic recession. Premium cabin revenue grew
faster than the main cabin in the first quarter.
"Consumers are anxious to travel," he said, adding that demand
for international travel was especially strong this summer and
travelers were booking trips well in advance.
Travel demand in the United States is currently strong but
rising interest rates, persistently high inflation, mounting job
losses and a turmoil in the banking industry have cast a shadow
over consumer spending.
U.S. carriers have leveraged the demand to offset rising labor
and fuel bills with higher ticket prices. But investors are
worried that any pullback in travel spending would hurt airline
profits.
American Airlines on Wednesday forecast first-quarter profit
below market expectations, joining rival United Airlines in
signaling a hit from high labor and fuel costs.
Bastian downplayed those concerns. He said Delta recorded the 10
highest sales days in its history last month and had been able
to protect its pricing power despite adding capacity.
The company expects its revenue in the June quarter to rise 15%
to 17% from a year ago on capacity growth of 17%.
"We're growing supply at that level and not seeing a
deterioration in the overall revenues," he said. "It's unusual
in our industry."
Delta expects an adjusted profit of $2.00 to $2.25 per share in
the second quarter, with an operating margin of 14% to 16%. That
is higher than a profit of $1.66 per share estimated by
analysts.
Non-fuel costs for the quarter are projected to rise between 1%
to 3% year-on-year. Delta pilots last month ratified a new
contract that includes over $7 billion in cumulative increases
in pay and benefits over four years and is widely expected to be
a benchmark for contract negotiations at rival carriers.
Delta retained its full-year earnings forecast after reporting
adjusted profit for the first quarter of 25 cents a share, below
30 cents a share expected by analysts.
(Reporting by Rajesh Kumar Singh; Editing by Jamie Freed)
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