What happened

Shares of Delta Air Lines (NYSE:DAL) gained 12.9% in value last month, according to data provided by S&P Global Market Intelligence. The company turned in a stellar first-quarter earnings report that caused investors to revise their previously low expectations.

An airplane flying above the clouds.

IMAGE SOURCE: GETTY IMAGES.

So what

Entering 2019, there was concern that the major airlines would struggle to grow the top line due to low jet fuel prices. The concern was that lower fuel costs would limit the ability to raise ticket prices, since competition would cause airlines to pass that savings on to the customer. After seeing solid share price gains through 2017, airline stocks cooled off in 2018, as investors waited to see how airlines would perform.

However, Delta's first quarter showed that those fears were overblown, as Delta delivered a record quarter ending in March. Adjusted revenue increased 7.5% year over year, with 55% of revenue coming from premium products and nonticket sources.

Moreover, good cost controls and the renewal of the American Express contract agreement helped fuel growth in adjusted earnings per share of 28% year over year.

Now what

CEO Ed Bastian sees strong performance continuing through the year: "With the momentum in our business and our American Express contract renewal, we have increased confidence in achieving our full-year plan of top-line growth, margin expansion and double-digit earnings growth."

Based on the company's momentum, management raised guidance, calling for full-year revenue growth of 5% to 7% year over year. Assuming there are no other speed bumps in the way, like a downturn in the economy, there could be more upside to Delta stock, since the valuation remains quite low at a forward P/E of 8.03.