Late-Quarter Surge Breeds Optimism for Delta Air Lines

Michael Wildes

Wednesday, April 13, 2022 at 05:31 PM ET

Verified

Delta lost $940 million in the first quarter of 2022, operating on revenue of $9.3 billion. [Courtesy: Delta Airlines]

Key Takeaways:

Delta experienced a significant rebound in consumer travel demand towards the end of Q1 2022, driven by easing restrictions, and is confident it will return to profitability in Q2 despite a Q1 loss.
The airline's Q1 adjusted revenue exceeded initial guidance, recovering 79% of 2019 levels, with executives noting consumers are prioritizing travel despite inflation and rising fares.
Delta expects to offset increasing fuel costs through robust customer demand allowing for higher prices and the strategic advantage of its Monroe refinery.
To meet anticipated strong summer demand, Delta is ramping up capacity to 84% of 2019 levels and has proactively hired over 15,000 new employees, including pilots.

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Despite a sluggish start to the quarter due to travel restrictions and increasing fuel prices, Delta Air Lines (NYSE: DAL) CEO Ed Bastian said Wednesday that strong numbers late in the quarter prove that travel demand is rebounding and his company is confident that it will turn a profit in the second quarter.

“Consumer demand accelerated through the quarter, highlighted by solid spring break performance. As omicron faded, offices reopened, and travel restrictions were lifted, resulting in an improvement in business travel demand and a stronger fare environment,” the airline said in a statement.