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SEC filingDelta reported strong revenue growth of 12.9% to $15.9 billion in Q1 2026, driven by premium product demand and diversified businesses, but recorded a net loss of $289 million due to refinery hedge losses and other items, while core airline operations remained profitable and cash generation improved.
Delta's revenue increased 12.9% year-over-year to $15.9 billion in the first quarter of 2026. This growth was driven by multiple factors across the business. In the Atlantic region, demand for premium products was a primary driver, while domestically, strong demand for premium products from corporate customers contributed to the increase. Beyond passenger revenue, the company experienced higher refinery sales to third parties and growth in its Maintenance, Repair, and Overhaul (MRO) business, demonstrating the benefits of Delta's diversified revenue streams beyond core airline operations.
Operating income of $501 million represented a 3.2% operating margin for the quarter. While this reflects continued profitability in core airline operations, it represents a 12.0% decline from the prior year period. The company's fuel consumption was higher during the quarter compared to the prior year period due to increased capacity, which impacted operating costs. Management's commentary indicates that refinery cost of goods sold are included within aircraft fuel and related taxes and refinery expense in the income statement, providing transparency around how these operations are reflected in financial results.
The company reported a net loss of $289 million for the quarter, resulting in diluted earnings per share of -$0.44. This contrasts with net income of $240 million and EPS of $0.37 in the prior year quarter. The loss primarily results from the recognition of settlement losses on fuel hedge contracts related to inventory that is expected to be sold in the future. Management notes that these losses were partially offset by higher industry refining margins. This dynamic highlights the complex nature of Delta's integrated refinery operations and their impact on quarterly results.
Net cash provided by operating activities was $2.4 billion for the quarter, representing an improvement from the prior year period. This strong cash generation was supported by ticket sales and SkyMiles monetization, with payments typically due monthly based on the volume of miles sold during the period. The company's cash flows related to certain airport construction projects are included in GAAP operating activities and capital expenditures. Management has adjusted for these items because they believe investors should be informed that a portion of these capital expenditures from airport construction projects are either reimbursed by a third party or funded with restricted cash specific to these projects.
Delta's capital allocation strategy continues to focus on long-term growth and operational efficiency. The company's expected 2026 capital spend will be primarily for aircraft, including deliveries and advance deposit payments, as well as fleet modifications and technology enhancements. These investments support Delta's competitive position and operational reliability while positioning the company for future growth. The integration of the refinery operations, despite creating quarterly volatility from hedge accounting, remains part of Delta's broader strategy to manage fuel costs and create value across the integrated business model.