How DAL (Delta Air Lines) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a leading airline like DAL (Delta Air Lines) makes money is essential for investors and anyone interested in the business of commercial aviation. In this post, we break down DAL's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick DAL Overview

Delta Air Lines (DAL) operates one of the world’s largest airline networks, providing passenger and cargo air transportation services globally. Revenue comes primarily from ticket sales, loyalty programs, and ancillary services, with additional contributions from its refinery operations. The business is structured around core airline operations and a smaller, but strategically important, refinery segment that helps manage fuel costs.

Revenue Breakdown

• Total Revenue (Q3 2025): $16.7B (+6.4% YoY)
  • Airline Revenue: $15.2B (91.1% of total, +4.1% YoY)
  • Refinery Revenue: $1.80B (10.8% of total, -6.1% YoY)
  • Other Revenue by Product: -$319M (-1.9% of total, -61.5% YoY)
• Growth is powered by resilient demand for air travel, premium cabin sales, and loyalty program expansion, partially offset by a decline in refinery revenue.

Gross Profit and Margins

• Gross Profit: $3.91B (23.5% gross margin)
  • Cost of Revenue: $12.8B (+7.7% YoY)
  • DAL maintains moderate margins due to its scale, operational efficiencies, and ability to manage fuel costs through its refinery segment.
• Most costs come from fuel, labor, aircraft maintenance, and airport fees.

Operating Income and Expenses

• Operating Income: $1.68B (+20.5% YoY, 10.1% margin)
• Operating Expenses: $2.23B (-8.2% YoY)
  • R&D: Not separately disclosed for Q3 2025
  • SG&A: $1.04B (+61.3% YoY, 6.2% of revenue) — includes sales, marketing, and administrative costs, reflecting increased investment in customer experience and digital initiatives.
  • DAL continues to invest in growth and customer service while maintaining efficiency in core operations.

Net Income

• Pre-Tax Income: $1.78B (+13.8% YoY, 10.7% margin)
• Income Tax: $360M (20.3% effective tax rate)
• Net Income: $1.42B (+11.4% YoY, 8.5% net margin)
• DAL converts a significant portion of sales into profit due to its scale, pricing power, and disciplined cost management.

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What Drives DAL's Money Machine?

• Airline Revenue: Over 91% of revenue comes from passenger and cargo operations, underpinned by strong demand and premium offerings.
• Key metric: Passenger yield and load factor improvements drive revenue per available seat mile (RASM) higher.
• Investment area: Heavy investment in digital transformation and customer loyalty programs to enhance long-term customer value.
• Future growth areas: Expansion of international routes and premium services, though some segments (like refinery) remain volatile and less profitable.

Visualizing DAL's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and core airline costs) taking the largest chunk.
• Even after significant costs, 8.5% of revenue drops to the bottom line.

Key Takeaways

• DAL's money comes overwhelmingly from airline operations (ticket sales, loyalty, cargo)
• High gross and net margins illustrate the power of DAL’s scale and operational discipline
• Heavy investment in customer experience and digital, balanced by efficiency in operating costs
• Ongoing growth is driven by premium cabin demand, loyalty programs, and international expansion

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FAQ About DAL's Income Statement

1. What is the main source of DAL's revenue in 2025?

DAL generates over 91% of its revenue from airline operations, including passenger ticket sales, cargo, and loyalty programs. Refinery operations contribute about 11%, while other revenue is negative due to accounting adjustments.

2. How profitable is DAL in Q3 2025?

DAL reported net income of $1.42B in Q3 2025, with a net margin of approximately 8.5%, reflecting strong profitability driven by robust demand, premium product mix, and disciplined cost control.

3. What are the largest expense categories for DAL?

The biggest expenses on DAL’s income statement are cost of revenue (fuel, labor, maintenance) and operating expenses, particularly Sales, General & Administrative (SG&A) costs. SG&A reached $1.04B in Q3 2025, as DAL prioritizes customer experience and digital transformation.

4. Why does the refinery segment operate at a loss?

The refinery segment, despite generating $1.80B in revenue, posted a YoY decline and often operates at a loss due to volatile fuel prices and thin refining margins. DAL maintains this segment to help manage fuel costs for its core airline business, accepting short-term losses for long-term strategic benefit.

5. How does DAL's effective tax rate compare to previous years?

DAL's effective tax rate in Q3 2025 was 20.3%, consistent with recent years. This moderate rate is primarily due to the mix of domestic and international earnings and available tax credits.