Delta Maintains Profit Forecast

Delta Air Lines (NYSE:DAL) said Thursday that the surge of the omicron variant of COVID-19 will drive it to a first-quarter loss, but that it still expects to turn a profit this year on stronger travel demand.

In the fourth-quarter, Delta posted its highest revenue since late 2019, thanks in part to strong holiday bookings and more business travel.

Sales of $9.47 billion beat analysts’ expectations for $9.21 billion. The company is still yet to fully recover from the COVID-19 crisis. Revenue was down 17% from $11.44 billion during the last three months of 2019, just before the coronavirus pandemic began.

CEO Ed Bastian said omicron is expected to delay the rebound in travel demand by 60 days.
President Glen Hauenstein cautioned: "The recent rise in COVID cases associated with the omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from President’s Day weekend forward."

It set aside $108 million in employee profit sharing, its first in nearly two years.

"Amid the continuing challenges, including one of the most difficult holiday environments we’ve ever encountered, you continue to rise above and provide unmatched service to our customers," Bastian said in a note to employees.

Delta posted a net loss of $408 million in the fourth quarter as fuel and other costs rose, partly driven by disruptions from omicron’s spread. Adjusting for one-time items, Delta reported per-share earnings of 22 cents, ahead of 14 cents Wall Street expected.

For the full year, Delta reported $280 million profit, its first in two years, thanks to $4.5 billion in federal aid for airline labor costs during the crisis. In 2020, after travel demand plunged, Delta recorded its biggest-ever loss: $12.4 billion.

DAL shares took on 75 cents, or 1.9%, to $41.37.