Delta beats third-quarter earnings estimates as travel demand grew, but costs weigh

Strong travel demand, particularly from high-paying passengers, boosted Delta Air Lines‘ revenue and profits in the third quarter, but costs rose as the airline ramped up flying.

Delta doesn’t fly the Boeing 737 Max, the troubled plane that has been grounded since March after the second of two fatal crashes. Competitors like American and Southwest that have the 737 Max in their fleets canceled thousands of flights in the quarter without access to the planes. As a result Delta picked up additional market share, which it expects to hold onto, Bastian said.

“Clearly, not having the Max helped us,” CEO Ed Bastian told CNBC in an interview, adding: “I don’t think it was the main driver” of the quarter’s results.

As it increased flying, employee wages help drive up Delta’s costs 2.4% in the three months ended Sept. 30. Shares were down 3.5% in premarket trading.

Delta’s revenue rose 5% from a year ago to $12.56 billion, slightly below analysts’ forecasts, the airline reported on Thursday. Net income rose more than 21% to $1.5 billion. Sales from its premium cabins, like first class, rose 9%.

Per-share earnings on an adjusted basis came in at $2.32, compared with analysts’ estimates of $2.26 a share.

Delta expects per-share earnings of between $1.20 and $1.50 in the fourth quarter and revenue per seat mile, a key industry metric of how much an airline is generating for each seat it flies a mile, to rise no more than 2%.

The airline’s executives will hold a call to discuss the results at 10 a.m. ET.