Bumpy start for Delta but profitability in March
After a bumpy end to the year and a start to 2022 with an increase in flight cancellations and an increase in Covid-19 cases, Delta Air Lines forecasts a return to “solid profitability” in March, with “demand significant” of pent-up consumer and business travel, the executives mentioned.
Delta’s operations stabilized last week, with cancellations related to the omicron variant of Covid-19 affecting only about 1% of flights, including just two on Wednesday, Delta CEO Ed Bastian said.
“Although the new variant is not finished, it seems that the worst is behind us,” said Bastian.
“Given the high transmissibility and low severity of the omicron, this variant is likely to mark the transition of Covid-19 from a pandemic to a manageable and ordinary seasonal virus, which should accelerate our path towards an environment While the first 60 days of the year will be impacted, we are confident that the pace of travel recovery will resume its December trajectory as we enter Presidents Day weekend, and a strong season trips in the spring and summer awaits us.”
In these first few months, however, the surge in omicron cases will affect business travel and the international recovery the most, as meetings are canceled, office reopenings are postponed and countries reinstate restrictions, Bastian added.
He said he anticipates pretax losses for the carrier in January and February.
The company’s business travel segment reported domestic passenger volume approaching 60% of 2019 levels during the fourth quarter of 2021, according to Delta. This figure included both the managed enterprise and small and medium enterprise sectors.
Delta reported fourth-quarter adjusted pre-tax profit of $170 million, about $30 million lower than the $200 million forecast just before the calendar disruptions at the end of 2021. adjusted were $8.4 billion, an improvement of 2%. on Q3 2021 revenue. The company also reported a full-year 2021 adjusted pre-tax loss of $3.4 billion on adjusted operating revenue of $26.7 billion. Capacity was restored to 79% of 2019 levels in the fourth quarter.
Fourth-quarter passenger revenue of $7.2 billion was 29% lower than the fourth quarter of 2019.