It’s Delta.

Again - though, things are getting tighter.

Delta reported an operating profit of $2.27 billion (with a B) on $16.7 billion in revenue, which ultimately became a net income of $1.30 billion (again, with a B). Delta's operating profit margin was 13.6%, compared to United’s 12.9%.

United earned $1.93 billion on $15.0 billion in revenue, resulting in $1.32 billion in net income.

Wait a minute - United had a higher net income that Delta. How can we declare Delta the winner?

Simply put, there are a lot of moving pieces between operating profit and net income, many of which don’t reflect the airline as an operation. Net income still matters, certainly, but the closest apples-to-apples comparison is operating profit.

But, as much as everybody seems to love the Sankey diagram when illustrating income statements, we’re left underwhelmed. Sure, they’re great for a first glance if you’re not familiar with the industry, but the airlines all look similar.

We prefer to look at year-over-year changes.

Yellow bars represent positive results (increases in revenues or decreases in expenses), while red represents the opposite. For Delta, the big mover was the bump in domestic revenues.

(Even though revenue from ancillary businesses jumped $285 million, the expenses also jumped $290 million, effectively making the change net negative, so we’ll disregard those larger bars.)

The two large unmistakable red bars are fuel and salaries. While the airline did grow since Q2 2023, those costs great faster.

Similar for United, which saw large increases in fuel and labor expenses.

Also of interest to us is the increase in distribution expenses for United. A $139 million jump (28.5% increase on a 5.2% increase in revenue) is interesting, particularly given American’s challenges with distribution compensation that came to a head this quarter.

However, the outlier isn’t United’s distribution spend in 2024; rather, it’s the lack of spending in 2023. Considering a new metric (one we just made up), this quarter, United earned $21.85 in passenger revenue for every dollar it spent on distribution and commissions - an effective 4.6% commission rate (including distribution costs). This is compared with Q2 2023, in which the airline earned $26.70 in passenger revenue for every dollar spent on distribution and commissions - an effective 3.7% commission rate.

Delta, on the other hand, sees $20.60 in passenger revenue for every dollar spent in distribution and commissions—an effective rate of 4.9%. Last year, it saw $20.29 at the same rate.

Our research published this week

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