Delta says Europe was its weakest region this summer. At first glance, that is surprising given crowded flights, but the details explain why.

Delta Says Europe Was Its Weakest Summer Region, Here Is Why

Speaking at a Morgan Stanley event earlier this week, Delta President Glen Hauenstein said:

“We have noticed that July and August are not the peak months for high-end leisure into Europe that we saw in 2022 and 2023. Our conclusion is that the travel season is extending longer, with September, October and, we think, even into November performing equally to or outperforming months like July and August in the future. Delta’s weakest performing entity this summer was transatlantic when you look at it in consolidation. It was driven by main cabin to a large degree, while Delta One and premium continued to lead the system, although very profitable still.”

Two things stand out. First, the traditional July and August peak is no longer the whole story. Shoulder months are taking more of the demand, which reduces the pricing power of midsummer travel. Second, softness was concentrated in the main cabin while premium cabins remained healthy, which is not ideal, but better than the reverse.

PRASM, CASM, And Why The Math Still Works

Passenger Revenue per Available Seat Mile (PRASM) is what the airline earns from ticket sales per seat mile. Cost per Available Seat Mile (CASM) is what it costs to fly those seat miles. Total Revenue per Available Seat Mile (TRASM) includes everything, like loyalty revenue and cargo, not just tickets.

For 2024, Delta reported roughly 17.65 cents of PRASM and about 19.30 cents of CASM, with total revenue around 21.37 cents per seat mile. In plain English, passenger ticket revenue alone did not cover fully loaded costs, but the total revenue mix did. That is how Delta still produced about $4.7 billion of net income for the year. Delta loses money on flying, just like its competitors. (This is why Southwest Airlines is so desperate to expand into he premium segment of the market, as it sees money via loyalty programs as the key to higher margins)

What Happened In Europe

Transatlantic capacity surged and leisure demand stretched beyond July and August. When more seats hit the market and demand spreads over more months, main cabin fares slide first. Premium demand stayed firm, which helped overall results, but not enough to keep Europe from ranking last inside Delta’s network for the summer.

But a longer season is not bad news for Delta or for travelers. It can improve aircraft and crew utilization, support more consistent spring and fall schedules, and even allow year-round service to some secondary cities with the right gauge and partnerships. The tradeoff is fewer sky-high midsummer fares and more balanced demand from April through November. In the long run, Delta wins and consumers win.

Speaking personally, I go to Germany when I can…but I far prefer going in May and October than in July or August. With climate change seemingly impacting Western Europe harder than other places, the summers have become. Much warmer and without A/C, somewhat unbearable when it does not cool down at night. Traveling in shoulder seasons is so much more attractive.

CONCLUSION

Although still surprising, Delta’s update is less a warning and more a reset. Premium cabins and corporate travel remain strong, but main cabin pricing to Europe softened as capacity rose and the peak stretched out. The math still works because total revenue per seat mile exceeded costs. The counterintuitive headline is that Europe was the worst-performing region after years of outpacing other regions. If shoulder months continue to strengthen, expect fewer fireworks in July and August and more steady flying across a longer travel season, which is better for travelers and, over time, better for network planning.

image: Delta // Hat Tip: One Mile At A Time