June 26, 2022

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Delta Air Lines Reports $940 Million Quarterly Loss But Says March Was Profitable

2 min read

The industry started the year with widespread flight disruptions as winter storms and staffing shortages caused by the fast-spreading Omicron variant of the coronavirus hampered its ability to handle the busy holiday season. At Delta, for example, about 8,000 employees — more than one in 10 — called in sick, the airline revealed in January. At the time, Mr. Bastian estimated that the variant had delayed the airline recovery by 60 days.

Delta said in January that it expected losses that month and in February, with a return to profitability in March. While Delta had expected a loss over the first three months of this year, it projected profits the rest of the year.

March started off strong, with several airlines reporting better-than-expected sales. But some of that improvement was dented by high fuel prices caused by Russia’s invasion of Ukraine and supply chain problems. Still, at an investor conference last month, American said it expected that the additional revenue would more than offset the rise in fuel prices.

At the same conference, Glen Hauenstein, the president of Delta, said the airline could “easily” increase fares in the second quarter to make up for rising fuel costs, recouping costs faster than normal because customers were booking flights closer to the date of travel. On an average one-way ticket price of about $200, the airline will need to recover $15 to $20, he said at the time. A United executive was similarly optimistic that the airline would be able to pass on fuel costs to customers in higher fares.

The industry turned a corner recently, according to an analysis by the Adobe Digital Economy Index. In February, for the first time since the pandemic began, ticket sales for domestic flights exceeded those for the same month in 2019, according to the analysis. The trend continued last month, with fares up 20 percent from March 2019, Adobe reported on Tuesday.

For the past several weeks, about two million people were screened daily at Transportation Security Administration security checkpoints, about 90 percent as many as were screened over a similar period in 2019.

Niraj Chokshi

2022-04-13 18:48:45

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