# How Delta Air Lines makes money

CXProWealth Business Lens · Delta Air Lines (DAL) · Q3 FY2026

Read from the 10-Q for the period 2026-07-01 to 2026-09-30, filed 2026-10-09 with the SEC (accession 0000027904-26-000038): https://www.sec.gov/Archives/edgar/data/27904/000002790426000038/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $20.2B (+43.8% on the year)
- Operating income: $1.5B (operating margin 7.2%)
- Net income: $756.0M (net margin 3.7%)
- Gross margin: not reported (the company reports expenses by nature: no cost of revenue or gross profit line exists)
- Free cash flow: —
- Cash conversion (operating cash flow / net income): 2.27x
- Capital expenditure: — of revenue

## Where the money goes (Q3 FY2026)

- Refinery → Total operating revenue: $2.6B
- Loyalty and related → Total operating revenue: $1.3B
- MRO → Total operating revenue: $296.0M
- Miscellaneous → Total operating revenue: $108.0M
- Passenger → Total operating revenue: $15.5B
- Cargo → Total operating revenue: $301.0M
- Total operating revenue → Total operating expense: $18.7B
- Total operating expense → Profit sharing: $389.0M
- Total operating expense → Contracted services: $1.3B
- Total operating expense → Aircraft fuel and related taxes: $4.4B
- Total operating expense → Depreciation and amortization: $673.0M
- Total operating expense → Aircraft maintenance materials and outside repairs: $662.0M
- Total operating expense → Salaries and related costs: $4.8B
- Total operating expense → Other: $633.0M
- Total operating expense → Passenger commissions and other selling expenses: $703.0M
- Total operating expense → Passenger service: $494.0M
- Total operating expense → Landing fees and other rents: $1.0B
- Total operating expense → Regional carrier expense: $680.0M
- Total operating expense → Aircraft rent: $159.0M
- Total operating expense → Refinery expense: $2.6B
- Total operating expense → MRO expense: $267.0M
- Total operating revenue → Operating Income: $1.5B
- Operating Income → Total non-operating income/(expense), net: $380.0M
- Total non-operating income/(expense), net → Miscellaneous, net: $18.0M
- Total non-operating income/(expense), net → Gain/(loss) on investments, net: $218.0M
- Total non-operating income/(expense), net → Interest expense, net: $146.0M
- Gain/(loss) on extinguishment of debt → Total non-operating income/(expense), net: $2.0M
- Operating Income → Income Before Income Taxes: $1.1B
- Income Before Income Taxes → Income Tax Provision: $318.0M
- Income Before Income Taxes → Net Income: $756.0M

## Where the revenue comes from

### Products and services (Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited))

| Member | Value | Share |
|---|---:|---:|
| Passenger | $15.5B | 77.0% |
| Other | $4.4B | 21.6% |
| Cargo | $301.0M | 1.5% |

The members sum to total revenue.

### Products and services (REVENUE RECOGNITION - Other Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Refinery | $2.6B | 12.9% |
| Loyalty and related | $1.3B | 6.7% |
| MRO | $296.0M | 1.5% |
| Miscellaneous | $108.0M | 0.5% |

The members do not sum to total revenue.

### Segments (SEGMENTS - Segment Reporting (Details))

| Member | Value | Share |
|---|---:|---:|
| Airline | $17.6B | 87.1% |
| Refinery | $3.0B | 14.7% |

The members do not sum to total revenue.

### AirlineDestinations (REVENUE RECOGNITION - Revenue by Geographic Region (Details))

| Member | Value | Share |
|---|---:|---:|
| Domestic | $14.4B | 71.1% |
| Atlantic | $3.9B | 19.2% |
| Latin America | $997.0M | 4.9% |
| Pacific | $959.0M | 4.8% |

The members sum to total revenue.

### ConsolidationItems (SEGMENTS - Segment Reporting (Details))

| Member | Value | Share |
|---|---:|---:|
| Operating Segments | $17.6B | 87.1% |
| Intersegment Sales/Other | -$366.0M | -1.8% |

The members do not sum to total revenue.

## Key insights

### Fuel absorbed the gains from a busier quarter

Revenue rose 21.1% but fuel cost rose 69.3%, so operating income fell even as sales grew.

Aircraft fuel and related taxes were $4.35B, against $2.57B a year earlier, up 69.3%. Fuel was 23.2% of total operating expense, against 17.1% a year earlier, and 21.6% of revenue, against 15.4%. _(from the filing)_
Total operating expense rose 25.0% while total operating revenue rose 21.1%. Operating income fell 13.7% to $1.45B, and the operating margin narrowed to 7.2% from 10.1% a year earlier. _(from the filing)_
Outside fuel and refinery expense, the large cost lines grew more slowly than passenger revenue, which rose 15.0%: salaries and related costs rose 8.5%, contracted services 9.5%, and landing fees and other rents 10.9%, while maintenance materials and outside repairs were nearly flat. _(from the filing)_
On these figures the pressure came from fuel, not from labor or the rest of the network's costs. That ties the margin to a commodity price the airline does not set: it recovers if fares keep pace with fuel or if fuel eases. _(analysis)_

### Refinery sales swell revenue but add no profit

Refinery revenue of $2.60B was matched by the same amount of refinery expense, so total growth overstates the airline's own growth.

Refinery revenue, the sale of refined products to other buyers, rose 76.2% to $2.60B, 12.9% of total operating revenue against 8.9% a year earlier. Refinery expense was also $2.60B, up from $1.48B. _(from the filing)_
The airline's own growth was slower: passenger revenue rose 15.0% to $15.53B, below the 21.1% rise in total revenue, and its share of revenue fell to 77.0% from 81.0%. _(from the filing)_
In the segment view, the refinery reported $2.97B of revenue including sales to the airline, and an operating loss of $33M. The airline segment earned $1.49B of operating income on $17.59B of revenue, 102.3% of the consolidated total. _(from the filing)_
Because these sales add the same amount to revenue and to cost, they lower the reported operating margin without changing operating income, so margins compared across quarters should allow for how much refinery revenue each carried. Owning a refinery is meant to cushion the fuel bill when refining margins widen; this quarter the segment lost money while fuel cost surged, so its value can only be judged across several quarters. _(analysis)_

### SkyMiles revenue nearly equals the quarter's operating income

Loyalty revenue grew 19.2% against 15.0% for passenger revenue, a growing line that carries no fuel bill of its own.

Loyalty and related revenue was $1.35B, against operating income of $1.45B, so it equals 92.6% of operating income. It rose 19.2% from a year earlier, while passenger revenue rose 15.0%, and it equals 8.7% of passenger revenue. _(from the filing)_
Its share of total revenue was 6.7%, almost unchanged from a year earlier, but only because refinery sales swelled the total. Measured against passenger revenue, the line gained ground. _(from the filing)_
This is a comparison of size, not a margin. Loyalty revenue is a top line: the seats and services members redeem have costs recorded elsewhere, so it does not mean SkyMiles alone earns most of the profit. _(analysis)_
A line that grows faster than flying and does not burn fuel steadies the business in a quarter like this one. A slowdown in loyalty growth during a weak consumer stretch would remove that cushion when it is most needed. _(analysis)_

## For members

Signed-in members read, on the page: the investor's and the founder's views of Delta Air Lines (its fundamentals against its peers, where the profit is made, how the model works, where every $100 of revenue goes against the industry, the path to scale), its performance over time with every line as filed, and the edge and the risks. Membership is free.

## Member research

Signed-in members read, on the page: what Delta Air Lines's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Delta Air Lines 10-Q for the period to 2026-09-30: https://www.sec.gov/Archives/edgar/data/27904/000002790426000038/ (2026-10-09)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-03 · as of 2026-11-03