2026 Consumer Conference Takes: DAL - Durable Model Shines Through on The Beach

Research evidence excerpt

2026 Consumer Conference Takes: DAL - Durable Model Shines Through on The Beach

emand Strength Across the Curve w/ Main Cabin Inflecting Positive. Mgmt noted

demand remains resilient and broad-based across customer type, cabin and region. Europe pt of Exhibit 1 - Durable and Diversifed Model Drives

sale (~20% of Atlantic revenue) was weak last yr with trends unch. Premium continues to lead y-o-y Industry Leading Margins

growth (avg outperformance of 13pts vs Main over past 4 quarters), Main Cabin RASM inflected in 14.0%

11.6% 12.0%

10.6% 10.0% 10.6%January and the gap has narrowed through the year, helped by easier comps.We est 2026E/2027E 10.0% 9.6% 9.1%

8.4% Margin 7.9% 8.0%

8.0% 7.6%

6.6%TRASM +10.6%/-0.5% y-o-y; Each 1pt of RASM in 2027 is worth ~$0.60 of EPS or +8%.

6.0%

6.0% Operating 4.3%

Diversified Revenue Streams Bolster Performance Over LT w/ Premiumization at Forefront. In Adj. 4.0%2.0% 3.0% 1.9%

2025, 60% of revs were generated from diversified streams, including premium (37.9%), loyalty 0.0%

(13.0%), Cargo (1.5%), MRO (1.4%). Premium revenue outpaced main cabin by 12pts in '25 (Ex 5) and FY23 FY24AAL UALFY25DAL FY26E FY27E

continues to lead in '26 as premium is proving to be less elastic (80% repurchase rate from premium .Source: Company data, Jefferies estimates

cabin customers). DAL remains focused on optimizing its premium merchandising strategy w/

tiered fare options (Basic, Classic, Extra) for Comfort+ seats w/ rollout to premium cabins in H2,

further maximizing revenue per foot of the aircraft. We est each pt of premium revs could add $0.05

to EPS given our assumption of 14% margin (5pts ahead of 2027E company pretax margin) on our

base '27 EPS of $7.65. MRO is guided to increase ~50% in 2026 with potential for revenues to 2-3X

in the next 5 years.