DOWNLOAD
Sub-sector: Airlines
Delta Air Lines
- Sector: Transportation
- Sub Sector: Airlines
- Country: US
- Bond: DAL 5.25 30
- Indicative Yield-to-Maturity (YTM): 4.50%
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 15 Jan 2026Delta’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.
Our Outperform had been predicated on an eventual move to A-category ratings for the Delta credit- we still think that can happen down the line. With the DAL 5.25% 7/2030 trading at +80, we are removing O/P call and moving to Market Perform while we wait out the credit card noise.
Business Description
AS OF 15 Jan 2026- 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 15 Jan 2026DAL faces all the industry exogenous risks: geopolitical events, pandemics, oil price volatility, and 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.
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.
Capping credit card rates (as well as interchange reform) could be a significant headwind to loyalty programs, where Delta is strongest.
Key Metric
AS OF 15 Jan 2026| $ mn | Y23 | Y24 | Y25 | LTM 4Q25 |
|---|---|---|---|---|
| Revenue | 58,048 | 61,642 | 63,364 | 63,364 |
| EBIT | 5,521 | 5,995 | 5,822 | 5,822 |
| EBITDAR | 8,843 | 9,482 | 9,239 | 9,239 |
| Cash | 2,741 | 3,069 | 4,310 | 4,310 |
| Short Term Investments | 10,061 | 721 | 0 | 0 |
| Net Debt | 16,269 | 13,151 | 9,796 | 9,796 |
| Adjusted Debt/LTM EBITDAR | 3.3x | 2.6x | 2.4x | 2.4x |
CreditSight View Comment
AS OF 15 Jan 2026For 2026, Delta’s guide was slightly below the Street but still reflects earnings growth in excess of 20% for the year on 3% capacity growth. Leverage is expected to end the year at a solid 2x (vs. a 1x long-term target), and debt reduction remains a priority. However, if the year goes well, management indicated shareholder returns could resume this year. The potential for credit card reform is looming. Talks of 10% APR caps as well as interchange reform are troubling for a premium/loyalty-heavy airline like DAL. Our Outperform had been predicated on an eventual move to A-category ratings for the Delta credit- we still think that can happen down the line. With the DAL 5.25% 7/2030 trading at +80, we are removing O/P call and moving to Market Perform while we wait out the credit card noise.
Recommendation Reviewed: January 15, 2026
Recommendation Changed: January 14, 2026
Featured Issuers
Bank of Philippine Islands
SK Hynix
Hyundai Motor
