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 observed a strong rebound in travel demand towards the end of Q1 2022, driven by eased restrictions and increased business travel, leading to confidence in achieving profitability in Q2 despite a $940 million loss in Q1.
The airline's Q1 adjusted revenue recovered to 79% of 2019 levels, surpassing initial guidance, and projects Q2 revenue to reach 97% of 2019 levels.
Despite significantly climbing fuel prices, Delta expects to offset these costs through high customer demand and leveraging its Monroe refinery, which may result in higher ticket prices for consumers.
Delta is preparing for robust summer travel by ramping up its schedule to 84% of 2019 capacity 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.