Delta Air Lines vs Southwest Airlines
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KIRA’s take AI analyst
I put Delta Air Lines and Southwest Airlines side by side, using each one’s latest annual report. Here is what stands out:
- Delta Air Lines is the larger business, with $63.4B of revenue in fiscal 2025 against $28.1B for Southwest Airlines, about 2.3 times as much.
- Delta Air Lines grew revenue faster (2.8%, against 2.1%).
- Delta Air Lines kept more of each dollar of sales as operating profit (9.2% operating margin, against 1.5%).
- Delta Air Lines turned more of its sales into free cash flow (6.1% FCF margin, against −3.0%).
- Delta Air Lines earned a higher return on the capital invested in it (16.0%, against 3.7%).
- Investors pay more for each dollar of Southwest Airlines’s earnings: a P/E of 20.9x against 15.8x for Delta Air Lines.
Who comes out ahead
Of the 10 measures where higher (or lower) is clearly better, how many each company leads.
Delta Air Lines
DAL
7/10
Revenue growth5-year growthOperating marginNet marginFCF marginReturn on capitalReturn on equity
Southwest Airlines
LUV
2/10
Net debt / EBITDAShare count change
Side by side
Best in the row
| Latest fiscal year | DAL FY25 | LUV FY25 |
|---|---|---|
| Size | ||
| Market cap | $52.2B | $21.2B |
| Revenue | $63.4B | $28.1B |
| Free cash flow | $3.8B | −$831M |
| Net income | $5.0B | $441M |
| Growth | ||
| Revenue growth | 2.8% | 2.1% |
| 5-year growth | 30.0% | 25.4% |
| Share count change | 0.9% | −13.2% |
| Profitability | ||
| Gross margin | — | — |
| Operating margin | 9.2% | 1.5% |
| Net margin | 7.9% | 1.6% |
| FCF margin | 6.1% | −3.0% |
| Return on capital | 16.0% | 3.7% |
| Return on equity | 27.7% | 4.8% |
| Balance sheet | ||
| Net debt | $9.8B | $1.8B |
| Net debt / EBITDA | 1.2x | 0.9x |
| Dividends and buybacks | $440M | $2.9B |
| Valuation & quality | ||
| P/E | 15.8x | 20.9x |
| Piotroski F-score | 7 | 7 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.