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

Welcome to the Value Sense Blog, your resource for insights on the stock market! At Value Sense, we focus on intrinsic value tools and offer stock ideas with undervalued companies. Dive into our research products and learn more about our unique approach at valuesense.io

Explore diverse stock ideas covering technology, healthcare, and commodities sectors. Our insights are crafted to help investors spot opportunities in undervalued growth stocks, enhancing potential returns. Visit us to see evaluations and in-depth market research.

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 operates one of the world’s largest airline networks, providing passenger and cargo air transportation services globally. Revenue comes primarily from ticket sales, ancillary passenger services, and cargo, with a smaller but notable contribution from its refinery operations. The business is structured around its core airline segment and a vertically integrated refinery segment, which helps manage fuel costs and supply.

Revenue Breakdown

• Total Revenue (Q3 2025): $16.7B (+6.4% YoY)
  • Airline Revenue: $15.2B (91.1% of total)
  • Refinery Revenue: $1.80B (10.8% of total)
  • Other Revenue by Product: -$319M (-1.9% of total, reflecting intersegment eliminations and adjustments)
  • Growth is powered by robust passenger demand, premium cabin sales, and continued strength in international routes.

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, efficient fleet utilization, and vertical integration with its refinery operations.
• Most costs come from fuel, labor, aircraft maintenance, and airport-related expenses.

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 functions, reflecting increased investment in customer experience and digital initiatives
  • DAL continues to invest in operational efficiency and customer service while maintaining cost discipline.

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 operational leverage.

What Drives DAL's Money Machine?

• Airline Revenue: Over 91% of revenue comes from passenger and cargo operations, with premium cabins and international routes as key drivers.
• Capacity Utilization: High load factors and efficient fleet deployment support revenue growth and margin expansion.
• Refinery Integration: Strategic investment in its refinery segment helps control fuel costs, a major expense for airlines.
• Future growth areas: Expansion into premium travel experiences, loyalty programs, and digital services, though these are not yet major profit contributors.

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 its core airline operations
• High gross and net margins illustrate the power of DAL's scale and operational efficiency
• Heavy investment in customer experience and digital initiatives, balanced by efficiency in operating costs
• Ongoing growth is driven by premium travel demand, international expansion, and cost management

Explore More Investment Opportunities

For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:

📌 50 Undervalued Stocks (Best) overall value plays for 2025
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)

🔍 Check out these stocks on the Value Sense platform for free!

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 ancillary services. Refinery operations contribute about 11%, with minor adjustments from other sources.

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 high demand, operational scale, and effective cost management.

3. What are the largest expense categories for DAL?

The biggest expenses on DAL's income statement are cost of revenue (primarily fuel, labor, and 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 Refinery Revenue operate at a loss?

Refinery, despite generating $1.80B in revenue, posted negative growth (-6.1% YoY) and is often used strategically to manage fuel costs rather than as a profit center. DAL invests in this segment to stabilize fuel supply and pricing, accepting short-term losses for long-term operational benefits.

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.