Delta Air Lines ($DAL) filed a second-quarter earnings release last week positively brimming with enthusiasm. Delta is typically the first of the major U.S. airlines to file every quarter, so we thought we’d catch up on the airline sector today before the other majors follow with their Q2 reports later this month.

The most important non-GAAP metric the airlines report is TRASM, short-hand for total revenue per available seat mile. It measures efficiency of an airline, and you calculate it by dividing operating income into available seat miles. TRASM is typically reported in cents; the higher the number, the more revenue the airline is wringing from each seat on its airplanes flying through the sky.

Obviously the covid-19 pandemic sent TRASM plummeting in 2020, and airlines have been marching back to pre-pandemic levels ever since. We used our Interactive Disclosure tool to dig up the details. Figure 1, below, shows how TRASM has fluctuated for five major airlines over the last four years.

All five airlines saw predictable declines in 2020, followed by a steadily accelerating return to normal until 2022. That’s when inflation started causing airfare prices to spike, so we see that pop at the beginning of 2022; followed by a clearly visible decline in latter 2022, perhaps due to consumers and business customers putting some flight plans on hold because prices had risen so high and so swiftly.

On the other hand, regardless of the narrative about the whole industry, Delta (the blue line in Figure 1) is clearly outpacing its peers in TRASM, even through Q1 2023.

TRASM, however, only brings your analysis so far. Airlines also report CASM, cost per available seat mile. Figure 2, below, charts TRASM and CASM for Delta from the start of 2019 through the Q2 2023 numbers reported last week.

Look at that divergence in the most recent quarter! Revenue clearly pulling away from cost (good), with revenue rising and cost falling. No wonder CEO Ed Bastian sounded downright giddy in his most recent earnings call. Delta raised its earnings guidance for the rest of the year and reaffirmed billions in free cash flow that it can use for further investments, hiring employees, share buybacks, or whatever else might come to mind.

What will other airlines report for Q2? We eagerly await the arrival of their filings.

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