DOWNLOAD
Delta Air Lines
- Sector: Transportation
- Sub Sector: Airlines
- Country: US
- Bond: DAL 5.25 30
- Indicative Yield-to-Maturity (YTM): 4.534%
- Credit Rating : Baa2/BBB/BBB
Access this content:
If you are an existing investor, log in first to your Metrobank Wealth Manager account.
If you wish to start your wealth journey with us, click the “How To Sign Up” button.
Fundamental View
AS OF 14 Oct 2025- Delta’s focus on premium cabin and atlantic flying driven by its loyalty program lead the airline to enjoy industry best profitability. Delta targets 1x gross leverage, an A level balance sheet in our view.
- Delta has Outperformed peers this year on its strong credit quality and defensive nature. We are retaining our O/P view and continue to favor DAL compared to LUV. We are happy to capture the basis between the two.
Business Description
AS OF 14 Oct 2025- DAL is one of the world's largest airlines with a network comparable to UAL and AAL in size and distribution. It is perceived by the flying public as the "most premium" of the Big Three network carriers in the US.
- DAL has an extensive global network of airline affiliations, including Air France/KLM, Virgin Atlantic, Aeromexico, LATAM, and China Eastern.
- DAL management is the most evolved of the US network airlines, previously focused on used aircraft to lower capital costs and setting up full-cycle maintenance programs, buying a refinery to hedge crack spread, and developing non-commodity products including the leading loyalty program.
Risk & Catalysts
AS OF 14 Oct 2025- DAL faces all the industry exogenous risks: geopolitical events, pandemics, oil price volatility, and now recessionary fears.
- The recently weaker dollar may manifest as a headwind to international demand. DAL was able to capitalize on strong Atlantic recovery post-pandemic through its extensive existing network; however, it lost its status as the number one airline on US-Europe routes to United which grew very fast in the segment and now occupies the first spot. 3Q Atlantic flying came in disappointing, but Domestic was very solid.
- DAL’s 1x leverage target is the lowest target in the industry.
- Higher income households are still outspending the middle and lower income ones, propelling Delta’s business even higher.
Key Metric
AS OF 14 Oct 2025| $ mn | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|
| Revenue | 50,582 | 58,048 | 61,642 | 62,920 |
| EBIT | 3,661 | 5,521 | 5,995 | 6,072 |
| EBITDAR | 6,276 | 8,394 | 9,056 | 9,076 |
| Cash | 3,266 | 2,741 | 3,069 | 3,791 |
| Short Term Investments | 8,412 | 10,061 | 721 | 0 |
| Net Debt | 16,634 | 16,269 | 13,151 | 11,088 |
| Adjusted Debt/LTM EBITDAR | 5.3x | 3.5x | 2.7x | 2.5x |
CreditSight View Comment
AS OF 14 Oct 2025Delta’s 3Q25 was yet another reminder of the power of its premium-driven business model. While competitors are pulling capacity, Delta is powering through, driven by strength in its premium segment. The Delta credit story remains intact, with $3bn of debt paydown on track for this year, on the way toward a 1.0x leverage target in the coming years. We retain our Outperform view on Delta and continue to expect ratings upgrades into the A category as the company executes on its capital structure target.
Recommendation Reviewed: October 14, 2025
Recommendation Changed: April 12, 2024
Featured Issuers
Bank of Philippine Islands
SK Hynix
Hyundai Motor
