Delta Air still sees 2022 profit even as COVID slows recovery
BNN Bloomberg
Delta Air Lines Inc. says the rapidly spreading omicron coronavirus variant will delay a recovery in travel by 60 days and contribute to a first-quarter loss but won’t derail the carrier’s expectation to remain profitable for the rest of the year.
Delta Air Lines Inc. says the rapidly spreading omicron coronavirus variant will delay a recovery in travel by 60 days and contribute to a first-quarter loss but won’t derail the carrier’s expectation to remain profitable for the rest of the year.
With COVID cases expected to peak in the U.S. in the next seven days, the pace of improvement in travel should resume its original December trajectory around Feb. 21, Delta said in a statement Thursday in which it disclosed fourth-quarter financial results.
“We still see our President’s Day and beyond booking patterns to be very healthy,” Chief Executive Officer Ed Bastian said in an interview. “People are ready to go, ready to travel.”
Delta is the first major U.S. airline to report financial results for a quarter battered by nearly 11,000 flight cancellations in the last 13 days of December and more than 13,200 in October, according to data tracker FlightAware.com. However, widely varying employee sick rates among airlines, which are continuing to ground some flights into 2022, may mean Delta’s results aren’t the industry bellwether for future results they normally are considered to be.
Delta rose three per cent before the start of regular trading in New York. The stock had dropped less than one per cent for the 12 months through Wednesday, while the S&P 500 rose 24 per cent.
About 8,000 Delta employees have caught the virus over the past four weeks, Bastian said. At its peak in late December and early January, the virus and winter storms forced the airline to cancel as much as 10 per cent of its scheduled daily flights. That shaved about US$75 million from fourth-quarter revenue and trimmed pretax profit to US$170 million from the company’s earlier expectation of US$200 million to US$250 million.
