Last Wednesday, Delta Air Lines (DAL -0.83%) delivered a strong June-quarter update and reiterated its 2025 outlook, helping steady sentiment after a choppy year for airlines. The Atlanta-based carrier, one of the largest global network airlines, highlighted resilient premium demand, steady co-brand card economics, and progress on costs — all while acknowledging ongoing softness in economy seats.

The mix between main cabin and premium cabins has become a key storyline for Delta. Premium revenue and loyalty economics are doing more heavy lifting, while management trims weaker main cabin flying and leans into higher-margin products. With this backdrop, are shares a buy? More specifically, with guidance intact and premium resilience evident, do shares offer an attractive risk-reward today?

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Recent results underline resilience

If there’s a meaningful slowdown in travel, Delta isn’t seeing it. The company’s second quarter produced record revenue and double-digit margins, giving management enough confidence to reiterate its full-year guidance. In the quarter, operating revenue was roughly $16.6 billion, operating margin was 13%, and earnings per share landed at $2.10 on the company’s non-GAAP basis. Management guided the September quarter to flat to up low-single-digit revenue growth year over year and a 9% to 11% operating margin, and reaffirmed full-year targets for earnings per share of $5.25 to $6.25 and free cash flow of $3 billion to $4 billion.

Beyond the headline numbers, the mix story stood out. Management said in the company’s second-quarter earnings call that “main cabin margins remain soft,” while reiterating that diversified revenue streams — credit card remuneration, loyalty, and premium cabins — now represent a large slice of the business. That matches comments on the call that softness is “largely contained to main cabin,” with premium products and the Delta-American Express partnership offsetting the pressure.

Asked whether the premium outperformance would persist, Delta president Glen Hauenstein said, “there’s nothing in any of the forward bookings that would have us indicate that there is a diminishing demand for premium cabins or services,” adding that Delta continues to evaluate aircraft layouts to “put more and more premium” seats on board. In addressing main cabin weakness, Hauenstein explained that the company is removing the “weakest trips,” often off-peak departures midweek or very early or late, to consolidate demand and improve unit revenues.

What it means for the stock

After this update, Delta provided an upbeat near-term revenue outlook and reaffirmed profit guidance, pointing to steady demand and industry capacity adjustments. Management now expects third-quarter revenue to be up about 2% to 4% year over year, and it provided earnings guidance of $1.25 to $1.75 per share.

Overall, this guidance signals that premium demand and loyalty revenue are cushioning the main cabin softness. And that industry supply is tightening where it’s least painful — the lower end of the market.

Valuation helps the case for the stock. With shares recently around $60 to $61, and a 2025 earnings target of $5.25 to $6.25 per share, Delta trades at roughly 10 to 11 times this year’s expected earnings — reasonable for a carrier producing double-digit margins and multibillion-dollar free cash flow. The company also raised its quarterly dividend by 25% earlier this year; at recent prices, the annualized dividend yield at about 1.2%, a modest payout that still signals confidence in cash generation.

There are risks. Main cabin softness could linger longer than expected, especially if consumer budgets tighten or international shoulder-season strength fades. Jet fuel and labor remain key cost variables, and any mistimed capacity reductions could pressure unit economics. But management is already trimming off-peak flying, expanding premium seating, and leaning on high-quality loyalty economics — strategies that can protect margins while demand normalizes.

Stepping back reveals that the picture is balanced but constructive, and ultimately good enough to make the stock a buy. Solid June-quarter profitability, guidance reaffirmation, resilient premium demand, and capacity discipline all support the view that Delta’s earnings power is intact. At a valuation that is not stretched, the shares look like a reasonable way to participate if premium strength and industry supply rationalization continue to play out. For investors comfortable with the usual airline cyclicality, Delta’s mix of premium momentum, loyalty cash flows, and cost focus makes the stock a credible buy candidate today.