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Delta Air Lines (DAL) earnings 3Q 22

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A Delta Airlines Airbus A-350 aircraft, flight number DL40 certain for Los Angeles takes off from Kingsford Smith International Airport on July 26, 2021 in Sydney, Australia.

James D. Morgan | Getty Images

Delta Air Lines expects to post one other profit within the last quarter of the yr and said each leisure and business travel proceed to get well, brushing off concerns over shakiness within the economy.

“Global demand is continuous to ramp as consumers shift spend to experiences, businesses return to travel and international markets proceed to reopen,” CEO Ed Bastian said on an earnings call Thursday. “Demand has not come near being quenched by a busy summer travel season.”

The Atlanta-based airline was the primary U.S. carrier to report third-quarter results, and its upbeat forecast contrasts with strains on other industries, like some retailers, and worries about high inflation.

Delta shares added 4% on Thursday, outpacing the broader market’s rally.

The carrier said it expects earnings per share of $1 to $1.25 within the fourth quarter, with revenue topping the identical period of 2019 by 5% to 9%, an indication higher airfares will stay firm.

For the third quarter, Delta reported net income of $695 million, or $1.08 per share, down from a $1.5 billion profit three years earlier, on record revenue of near $14 billion, the outcomes of a surge in summer travel with high fares to match. Adjusting for one-time items, Delta posted earnings per share of $1.51, while adjusted revenue got here in at $12.8 billion, 3% above 2019 levels, despite a smaller schedule.

Here’s how Delta performed within the third quarter, compared with Wall Street expectations based on Refinitiv consensus estimates:

  • Adjusted earnings per share: $1.51 versus $1.53 expected.
  • Adjusted revenue: $12.84 billion versus $12.87 billion expected.

The beginning of Delta’s peak spring and summer travel season was rocky, as disruptions prompted the airline and a few of its rivals to trim summer flights to avoid more problems for travelers. Delta said that its capability can be as much as 92% restored to 2019 levels within the fourth quarter and that it’s working toward a full recovery by next summer.

Delta and other airlines have been grappling with a surge in costs from labor to fuel. Delta’s fuel bill for the third quarter rose nearly 48% from 2019 to $3.32 billion.

Even stripping out fuel, costs per available seat mile were up near 23% from 2019 within the last quarter, partly increased because Delta didn’t fly as much.

Bastian told CNBC’s “Squawk Box” on Thursday that the airline is near its staffing needs and has hired about 20,000 people because the start of 2021, after an identical number took buyouts at the corporate’s urging through the coronavirus pandemic’s travel slump. He said the airline is now focused on training staff.

International travel, largely sidelined in 2020 and 2021, was a vibrant spot within the third quarter, with unit revenue growth outpacing domestic for the primary time because the pandemic began, Delta said, calling out Italy, Spain and Greece as popular destinations.

American Airlines, which reports its quarterly results next week, raised its third-quarter revenue and profit forecast on Tuesday, while United Airlines is planning one other big trans-Atlantic expansion for 2023, a bet international travel will proceed to rebound.

British Airways and Iberia owner International Consolidated Airlines Group on Thursday forecast a better-than-expected third quarter because of strong passenger revenue and said it sees “no indication of weakness” in fourth quarter bookings.

Executives at Delta and United have recently said European travel has been resilient this fall.

The airline said business bookings were 80% recovered to pre-pandemic levels at the top of the quarter and that recent surveys show 90% of corporate accounts indicating that they may maintain or increase travel within the fourth quarter compared with the third.

The carrier said Hurricane Ian, which ripped through Florida last month, cost it $35 million in revenue and had a 3-cent impact on adjusted per-share earnings.

Correction: Delta said its capability can be as much as 92% restored to 2019 levels within the fourth quarter. An earlier version misstated the timing of the statement.

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