The insight: Delta expects another record-breaking holiday season as the airline’s affluent customer base spends big on domestic and international travel.

• The airline forecast revenue growth in the 2% to 4% range for the December quarter, ahead of the 1.7% increase analysts expected.
• That would put Delta back on track to deliver the record performance it promised at the beginning of the year, before uncertainty temporarily derailed its plans.

An upbeat perspective: Delta’s bullishness is rooted in the strength of the premium customer, who remains determined to travel despite the uncertainty that is making the rest of the population uneasy.

• Affluent consumers’ “number one objective is to travel; it’s to go out and adventure, to invest in themselves, to invest in the experience economy,” CEO Ed Bastian said. Delta sits “at the sweet spot there for that cohort, and that’s what’s driving the great results that we’re seeing.”
• Revenues from premium seats surged 9% YoY to $5.8 billion, which more than offset a 4% decline in main cabin sales.
• While Delta still makes more money from economy seats (for now), most investment is being directed at the front of the plane. The airline plans to add a record number of premium seats next year and is introducing new forms of segmentation to push more customers to pay for upgrades.

On the other hand: While Delta’s strong performance bodes well for the upper-end of the travel industry, demand as a whole is weakening due to cost-of-living pressures, uncertainty, and higher prices.

• The number of Americans planning to travel for the holidays has fallen significantly YoY. Just 1 in 5 US adults (21%) plan to stay in a hotel or short-term rental or travel by plane this year, per Bankrate’s 2025 Holiday Spending Report. That’s down from 27% in 2024.
• Demand is softening across generations—most notably among Gen Zers and millennials, who are normally quick to indulge their wanderlust. Just 30% of Gen Z adults plan to travel this holiday season, down from 44% last year, in the latest sign that the worsening labor market and higher costs are straining the cohort’s finances.
• The decline of budget airlines coupled with the rising expense of once accessible vacations like a trip to Disney World, is making travel a proposition that few outside the wealthy can comfortably afford.

Our take: The travel industry is in a far more uncertain state than Delta’s upbeat earnings suggest.

• Pullback from low- and middle-income consumers is pressuring the rest of the airline industry (minus competitors like United that are also targeting the premium market) as well as hotels.
• The government shutdown could cost the US economy $1 billion a week in lost activity, due to air and rail disruptions as well as park and museum closures, according to the US Travel Association. That would have profound consequences for restaurants and retailers who rely on tourist traffic.
• Fewer international visitors are traveling to the US. Visits are expected to fall to 85% of their pre-pandemic levels, according to the US Travel Association, mainly due to a sharp decline in visits from Canadians. Inbound travel spending is also expected to decline 3.2% YoY.