United states

Profit of Delta Air Lines (DAL) for the first quarter of 2022

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

James D. Morgan | Getty Images

Delta Air Lines expects to return to profit this quarter thanks to a jump in reservations and tariffs that help offset rising fuel costs.

Shares rose more than 6% in pre-market trading after the airline reported results. Competitors such as American Airlines and United Airlines, which report next week, have also grown.

The airline said on Wednesday that it expects unit revenue to double in the second quarter compared to 2019, and that sales overall will recover to as much as 97% of sales generated three years ago before Covid devastated travel demand.

Delta is also increasing its schedule as the peak travel season approaches and plans to take off 84% of capacity levels in 2019 this quarter, the Atlanta-based airline said in a first-quarter earnings announcement.

Airlines are facing higher fuel prices and other rising costs. Domestic airline tickets in the United States increased by 20% last month compared to 2019, according to Adobe, a sign that passengers are willing to pay more for travel after two years of pandemic.

Delta expects its fuel-free costs to rise 17% in the second quarter as it increases flights and continues to rent to meet demand.

Here’s how Delta performed in the first quarter compared to analysts’ expectations, according to Refinitiv averages:

  • Adjusted loss per share: $ 1.23 versus $ 1.27 expected.
  • Revenue: $ 9.35 billion versus the expected $ 8.92 billion.

The carrier reported a net loss of $ 940 million in the first three months of the year on revenue of $ 9.35 billion, more than $ 8.92 billion in sales, which analysts surveyed by Refinitiv expected. Sales decreased by 11% compared to 2019 levels.

Carriers compare the results against 2019 to show their recovery compared to their performance before the pandemic.

Delta’s fuel bill grew by 6% from 2019 to $ 2.09 billion, although its capacity decreased by 17%. Jet fuel prices have more than doubled since last year and have risen more than 50 percent since the beginning of the year, according to Platts.

“As our brand preferences and demand momentum increase, we are successfully recovering higher fuel prices, boosting our prospects for an adjusted operating margin of 12 to 14 percent and strong free cash flow in the June quarter,” said the CEO. Ed Bastian in a press release.

In January, Delta predicted a loss for the first quarter, as new Covid cases peaked. Adjusting for one-off positions, Delta reported a loss of $ 1.23 per share for the period, slightly better than the adjusted loss of $ 1.27 expected by analysts.

The airline said other areas of its business have also improved. It generated $ 1.2 billion from its American Express credit card partnership, up 25 percent from the same quarter in 2019, while spending increased 35 percent from three years ago. Its refinery’s first-quarter revenue was $ 1.2 billion, up from $ 48 million three years earlier.

Delta ended the quarter with $ 12.8 billion in liquidity.

Delta executives will hold a talk at 10 a.m. ET to discuss the results with analysts and the media.