• The San Juan Daily Star

Delta Air Lines reports $1.2 billion quarterly profit, as demand recovers


Travelers waiting at the Delta Air Lines ticketing counter at Denver International Airport.

By Niraj Chokshi


Delta Air Lines on Wednesday reported a $1.2 billion profit for the three months ending in September, the latest sign of the resilience of the airline industry’s recovery, despite being slowed somewhat by the spread of the highly contagious delta variant of the coronavirus.


Even after excluding temporary factors, such as federal pandemic aid, Delta still generated a profit of $194 million.


“As the recovery progresses, I am confident in our path to sustained profitability,” Delta’s chief executive, Ed Bastian, said in a statement.


The airline offered optimism for the months ahead, saying that it expects to sell about 80% as many tickets in the final three months of the year as it did in 2019, driven by strong holiday demand. Delta also said it expected to collect at least 70% as much revenue in the fourth quarter as in 2019. During the third quarter, it collected 63% as much revenue as in 2019.


Rising fuel prices will make it harder to turn a profit in the final three months of the year, Bastian said. The airline expects jet fuel prices to rise to $2.25 to $2.40 per gallon in the coming months, up from $1.94 over the summer.


Delta, the only large carrier that has not announced a vaccine requirement for its workers, also said that about 90% of its employees had been vaccinated as of Tuesday. The airline recently said that it plans to charge unvaccinated workers $200 more per month for health insurance.


United Airlines was among the first major corporations to announce such a requirement and said recently that nearly all of its 67,000 employees have been vaccinated. American Airlines and Southwest Airlines have since announced mandates under pressure from President Joe Biden, who ordered federal contractors to get vaccinated by early December.


The aviation industry had a strong summer as Americans emboldened by vaccinations started to travel again, mainly within the United States. But the spread of the delta variant recently stifled that momentum, especially as companies delayed office reopenings and, subsequently, business travel.


With domestic leisure travel virtually restored, airlines are now waiting on the rebound in corporate and international travel to accelerate. The Biden administration plans to lift travel restrictions for foreigners next month, promising to revitalize a lucrative travel corridor between the United States and Europe.


Workers are also trickling back to offices. Corporate travel volume improved in July, but froze at about 40% of 2019 levels, Delta said. That has started to pick back up in recent weeks, driven by small and midsize business, the airline said.


Overall, travel has been relatively steady for weeks, with about 78% as many people flying over the past seven days, compared with a similar period in 2019, according to Transportation Security Administration passenger screening data. That’s only slightly lower than the high of 86% reached over the Fourth of July holiday, the peak of summer travel.


Delta wasn’t alone in expressing optimism for the coming months. Last week, United Airlines said it planned to offer 3,500 daily flights in December, the most of any month since the pandemic began and 91% as many flights as the airline offered in the same month in 2019. Flight searches for holiday travel were up 16% compared with the same time in 2019, the airline said.


“We’re seeing a lot of pent-up demand in our data and are offering a December schedule that centers on the two things people want most for the holidays: warm sunshine and fresh snow,” said Ankit Gupta, United’s vice president of network planning and scheduling.


Delta is the first major airline to report financial results for the third quarter. American, United and Southwest are all scheduled to announce earnings next week. American provided a preview on Tuesday, saying it expects to report a profit, mainly because of a temporary bump from federal pandemic aid. American also said it expected to offer slightly more seats in the final three months of the year than it did over the summer.


Recent Posts

See All