Delta Air Lines, Inc. — Q3 2026 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2026. Dollar amounts are in U.S. dollars; financial statement amounts are in millions unless otherwise noted. The interim financial statements received an independent accountant’s review, not an audit.
Business context and financial performance
Delta operates an airline and refinery business. Results reflect passenger and loyalty revenue, cargo and maintenance activity, and refinery sales to third parties. Management attributes passenger revenue growth to demand across premium, main-cabin and loyalty products.
| Metric | Q3 2026 | Q3 2025 | Nine months 2026 | Nine months 2025 |
|---|---|---|---|---|
| Operating revenue | $20.186B | $16.673B | $55.797B | $47.361B |
| Operating income | $1.454B | $1.684B | $3.819B | $4.355B |
| Net income | $756M | $1.417B | $2.070B | $3.786B |
| Diluted EPS | $1.15 | $2.17 | $3.15 | $5.80 |
| Operating cash flow | $1.713B | Not separately shown here | $5.740B | $6.082B |
Q3 operating margin was approximately 7.2%, compared with 10.1% a year earlier; nine-month operating margin was approximately 6.8%, versus 9.2%. Q3 passenger revenue rose 15% to $15.534B; total revenue rose 21%, with refinery sales to third parties contributing substantially. Adjusted revenue, excluding third-party refinery sales, increased 16% in Q3. Q3 free cash flow, a non-GAAP measure, was $463M.
Liquidity, debt and investment
- At September 30, cash and cash equivalents were $3.787B, compared with $4.310B at year-end 2025. Total liquidity, including short-term investments and undrawn revolving credit availability, was $6.9B; approximately $3.1B was undrawn under revolving facilities.
- Debt was $12.105B, down from $13.308B at December 31, 2025. Nine-month debt and finance-lease repayments were $3.334B. The company reported compliance with debt covenants.
- Nine-month capital expenditures were $4.1B. Management expects 2026 capital spending to exceed $5B. Aircraft purchase commitments totaled approximately $26.7B, with delivery timing subject to supply-chain, manufacturing and regulatory constraints.
- Current liabilities were $33.575B versus current assets of $13.490B; current liabilities include substantial air-traffic and loyalty-program deferred revenue. Management expects to meet near-term liquidity needs through cash and operating cash flow.
Changes, outlook and risks
- Operating costs rose faster than revenue: Q3 operating expense increased 25%, driven particularly by fuel, refinery-related expenses and employee costs. Non-fuel unit cost (CASM-Ex), a non-GAAP measure, increased 7.3% in Q3.
- Q3 average jet-fuel purchase price increased 63% year over year; nine-month average price increased 52%. Management expects elevated fuel costs to persist until market disruptions and geopolitical events are resolved.
- Non-operating results shifted to a $380M expense in Q3 from $93M of income a year earlier, chiefly due to investment valuation losses versus gains. Nine-month investment results were a $419M loss, compared with a $1.007B gain in 2025. Fuel hedges generated $719M of losses in the first nine months.
- The refinery reported a Q3 operating loss of $33M, compared with $53M of operating income a year earlier, following a temporary outage beginning in mid-June and reduced capacity during the quarter. It returned to normal production by quarter-end; management expects profitability in Q4 2026.
- Management projects a 2026 annual effective tax rate of 23%–25%, excluding the impact of equity-investment mark-to-market adjustments. It expects positive operating cash flow for the remainder of 2026.
- Legal proceedings and risk factors were reported as having no material changes from the 2025 Form 10-K. Management said current legal matters are not expected to have a material adverse financial effect, while noting outcomes cannot be predicted with certainty.
- Delta declared a quarterly dividend of $0.215 per share, payable November 5, 2026. Its $1B share-repurchase authorization remains unused through September 30, 2026.
Most important facts for investors to verify
- Whether elevated fuel prices and the reported fuel-hedge losses continue to pressure margins and cash flow.
- Whether the refinery sustains normal operations and achieves the expected return to profitability in Q4 2026.
- How investment valuation changes affect reported earnings, given the significant year-over-year swing in non-operating results.
- Whether operating cash flow and available liquidity remain sufficient alongside planned capital spending above $5B and $26.7B of aircraft commitments.
- Delivery schedules, financing needs and potential cost changes for aircraft orders, which Delta says are subject to industry constraints.