June 25, 2022

A Delta Air Lines Boeing 737 approaches LAX for landing.

Angel Di Bilio | iStock editorial team | Getty Images

Delta Air Lines on Wednesday reported second-quarter revenue beating Wall Street estimates and said vacation and business travel bookings rose sharply after more than a year of pandemic lockdowns.

The Atlanta-based airline made $ 652 million in profit and posted a five-quarter streak of losses thanks to federal coronavirus aid that offsets part of its costs.

Delta shares rose 1.5% in pre-trading hours after the results were released.

While weak international air traffic is still crippled, revenue will continue to improve compared to the last few months, Delta said. For the third quarter, Delta expects revenue to decline 30 to 35% from 2019 when it grossed $ 12.56 billion.

Delta and some other airlines often compare their results to pre-pandemic 2019, as the virus caused such dramatic shifts in demand last year.

The airline said that domestic vacation travel has fully recovered and that demand for business travel is also recovering. Average daily net cash sales – tickets purchased minus refunds – doubled in the first quarter, 20% above the original forecast.

It’s a sharp turnaround for Delta, which posted a record loss of $ 12.4 billion last year. Other airlines have also become more optimistic.

American Airlines said late Tuesday that it could make a “slight” pre-tax profit for the second quarter and said revenue is likely to be higher than expected.

The sharp surge in demand has been rocky for airlines – and passengers. Thousands of employees took vacations or early retirement packages at the urging of executives last year, leaving some airlines without trained pilots, customer service agents and other staff due to increasing demand. Federal aid forbade airlines to lay off workers.

Delta announced last month that it would be hiring more than 1,000 reservation agents and plans to hire approximately 1,000 pilots over the next year.

Delta is the first US carrier to publish results for the second quarter. American, United Airlines and Southwest Airlines are due to report next week.

Here’s how Delta performed against Wall Street expectations in the second quarter, based on Refinitiv’s average estimates:

  • Adjusted earnings per share: a loss of $ 1.07 versus an expected loss of $ 1.38 per share. That figure includes $ 1.5 billion in state payroll and other adjustments.
  • Total sales: $ 7.13 billion versus expected revenue of $ 6.22 billion

Revenue for the three months ended June 30 was $ 7.13 billion, down 43% from $ 12.54 billion for the same period in 2019, but more than analysts’ reports expected $ 6.22 billion.

“With a view to the future, we are using the power of our differentiated brand and resilient competitive advantages to achieve sustainable profitability in the second half of 2021 and enable long-term value creation,” said CEO Ed Bastian in the earnings release.

Delta had $ 17.8 billion in cash at the end of the quarter and total debt and lease obligations of $ 29.1 billion.

Delta said its capacity will decrease 28-30% in the third quarter. Capacity was down 32% in the second quarter, despite the airline being released until Jan.

Delta announced late Monday that it was adding used aircraft to expand its fleet: leasing seven Airbus A350 wide-body aircraft and purchasing 29 Boeing 737-900ERs. The gross capital expenditure for 2021 would amount to around 3.2 billion US dollars.