Delta grows optimistic as consumer travel rebounds

The big picture: Delta on Thursday projected better-than-expected third quarter profits and expressed optimism about the economy.

• "The fundamentals of the U.S. economy are solid," CEO Ed Bastian said Thursday on an earnings call. "Our core consumer is in good shape and continues to prioritize travel and affinity for Delta's brand has never been stronger."
• He added: "We expect both consumer and corporate confidence to improve in the second half of the year, creating the environment for travel demand to accelerate."

The impact: Delta's stock was up 12.7% to $57.11 at 12:58pm.

• Shares in competitor airlines also jumped, with United (+15.0%), American (+12.6%) and Southwest (+7.8%) all trading higher.

Flashback: In March, Bastian warned that "consumer spending started to stall" — and the company soon thereafter yanked its full-year guidance, citing economic uncertainty.

• Southwest Airlines and American Airlines also cited "softness" in domestic bookings around the same time.

What's changed: The federal reconciliation bill "creates certainty around tax policy," while "continued progress on trade negotiations" is cause for growing confidence, Bastian said.

By the numbers: The company reported record revenue for its most recent quarter of $15.5 billion, up about 1% from a year earlier.

• The company predicted third-quarter profit of $1.25 to $1.75 a share, which was "stronger at the midpoint than the $1.31 analysts had anticipated," WSJ reported.