Delta Air Lines Records Quarterly Profit
Delta Air Lines has recorded its first quarterly profit since the COVID-19 pandemic began, boosted by US government aid and a vaccination-led travel rebound, and said that it is expecting to remain pr...
Delta Air Lines has recorded its first quarterly profit since the COVID-19 pandemic began, boosted by US government aid and a vaccination-led travel rebound, and said that it is expecting to remain profitable for the rest of the year.
"Travellers are reclaiming their lives and returning to the skies," Delta chief executive Ed Bastian told investors, while saying the company was mindful of the risks that new COVID-19 variants pose to the recovery.
Net income reached $652 million, or $1.02 per share, in the three months to June 30, helped by billions of dollars in government aid for U.S. airline workers' salaries as well as a strong rise in quarterly revenues, which topped analyst estimates.
"Domestic leisure travel has fully recovered to 2019 levels, and there are encouraging signs of improvement in business and international travel," Bastian said.
Delta's second-quarter adjusted operating revenue fell 49% from 2019 to $6.35 billion, a marked improvement from the 60.4% slump in the first quarter and above analysts' average estimate of $6.22 billion.
Excluding items such as government payroll support, the company lost $1.07 per share in the second quarter.
Delta's results, the first by a major U.S. airline for the quarter, followed its announcement on Tuesday that it is adding 36 used jets to its fleet beginning next year through deals with aircraft lessors.
It will purchase 27 Boeing 737-900ERs from funds managed by Castlelake and finance another two with Castlelake while leasing seven Airbus A350 widebodies from AerCap .
As pandemic-weary people seek vacations, passenger traffic has reached its highest levels since March 2020, forcing U.S. carriers that downsized last year to take stock of their fleets and staffing to support the recovery.
Delta said it hired several thousand people during the quarter and continues hiring.
Corporate travel volumes also improved through the second quarter and could be 60% recovered by September as more offices re-open, Bastian said.
One segment that remains weak, however, is international travel as the United States continues to restrict entry to many travellers, including from Europe, one of Delta's biggest markets.
"Candidly it’s a source of great frustration for us,” Bastian said.
Shares lost 2% in midday trading, giving up opening gains as travel stocks broadly came under pressure.
Looking ahead, Delta said it expects adjusted operating revenue for the September quarter to be down 30% to 35% from two years ago, with the midpoint at $8.47 billion, above a Refinitiv-IBES estimate of $8.23 billion.
Rival American Airlines said Tuesday it could report a small profit in the second quarter, including special items like government aid.