An Airbus A330-323 aircraft, operated by Delta Air Lines.
Benoit Tessier | Reuters
Delta Air Lines on Wednesday reported a quarterly profit because of travelers willing to pay as much as fly, greater than making up for higher costs.
The carrier also vowed to enhance reliability after a rise in delays and cancellations prompted it to cut back its summer schedule.
Delta said its third-quarter capability could be 83% to 85% of 2019 levels, suggesting the carrier is sticking with a conservative schedule compared with some rivals. Delta expects a third-quarter profit and reiterated its forecast for full-year profitability.
It expects to see third-quarter sales 1% to five% higher than three years ago, together with higher costs.
“I would really like to thank our entire team for his or her outstanding work during a difficult operating environment for the industry as we work to revive our best-in-class reliability,” CEO Ed Bastian said in an earnings release.
Delta is the primary U.S. airline to report earnings this quarter. United Airlines and American Airlines report next week.
Here’s how the corporate performed within the second quarter compared with what analysts expected, in response to average estimates compiled by Refinitiv:
- Adjusted earnings per share: $1.44 versus $1.73 expected.
- Revenue: $13.82 billion versus $13.57 billion expected.
Executives for Delta and its fellow airlines will face questions from investors a couple of rocky peak travel season. Staffing shortages have exacerbated routine issues like bad weather, driving up the rates of flight cancellations and delays.
Over the important thing July Fourth holiday weekend, Delta allowed travelers to vary their flights without paying a difference in fare, an unusual waiver that the airline said would allow customers to avoid potential avoid flight disruptions.
Airlines executives and the Federal Aviation Administration have blamed each others’ staffing issues for contributing to the delays. Transportation Secretary Pete Buttigieg publicly admonished airlines for not being prepared for summer travel.
Despite those issues, demand rose for each business and leisure travel, Delta said. Domestic corporate travel sales are 80% recovered from before the pandemic, up 25 percentage points from the primary quarter of the 12 months, it said.
Delta’s costs for every seat it flew a mile, excluding fuel, were up 22% from 2019 for the three months ended June 30. Its fuel expense rose 41% from three years ago to $3.2 billion.
A surge in travel demand helped the airline post $735 million in net income. In a measure of how high fares have risen, Delta flew 18% less capability within the second quarter than it did in the identical period of 2019, however it generated $13.82 billion in revenue, 10% greater than three years ago.
Revenue for domestic travel was 3% higher, Delta said, noting it also logged improvements in trans-Atlantic travel.
Delta and other airlines have been comparing their results to 2019 to point out their progress in getting back to pre-pandemic performance.
Delta executives will discuss results with analysts and media at 10 a.m. ET Wednesday.