Delta Air Lines (DAL) Q1 2022 earnings

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

James D. Morgan | Getty Images

Delta Airlines hopes to return to profit this quarter thanks to bookings and fares, which are helping to offset rising fuel costs.

Shares in Premarket Trading rose more than 6% after the airline reported results.

The airline said Wednesday it expects unit revenue to double in the second quarter compared to 2019 and expects to recover an overall 97% of sales generated three years ago before demand for Covid crashed travel.

The Atlanta-based airline said in its first-quarter earnings release that Delta Peak is expanding its schedule as the travel season approaches and plans to fly 84% of its 2019 power level this quarter.

Airlines are facing higher fuel prices and other costs associated with ramping back-up. Domestic U.S. air fares rose 20% last month compared to 2019, according to Adobe data, a sign that passengers are willing to pay more for travel two years after the epidemic.

Delta expects its consumption excluding fuel to increase by 17% in the second quarter as it increases flying and continues to raise fares to meet demand.

Here’s how Delta performed in the first quarter, compared to analysts’ expectations based on average estimates compiled by Refinitive:

  • Consistent loss per share: 1.23 vs. 27 1.27 expected.
  • Revenue: Expected 9.35 billion vs. $ 8.92 billion.

The carrier reported a net loss of $ 940 million for revenue of $ 9.35 billion in the first three months of the year, more than the $ 8.92 billion of sales expected by analysts surveyed by Refinitive. Sales were 11% off the 2019 level.

Carriers are comparing results compared to 2019 to show their recovery vs. pre-epidemic performance.

Delta’s energy bill rose 6% to $ 2.09 billion from 2019, although its capacity was 17% lower. According to Platts, jet-fuel prices have more than doubled since last year and have risen more than 50% since the beginning of the year.

“As our brand preferences and demand accelerate, we are successfully recovering high fuel prices, driving our vision for a 12 to 14 percent consistent operating margin and strong free cash flow in the June quarter,” CEO Ed Bastian said in a press release.

In January, Delta forecast first-quarter losses as new Covid cases topped the list. Adjusting for one-time items, Delta posted a loss of 23 1.23 per share for the period, slightly better than the consistent loss of $ 1.27 expected by analysts.

The airline says other areas of its business have improved. It generated $ 1.2 billion from American Express credit card partnerships, up 25% from the same quarter of 2019, with costs up 35% from three years ago. The first quarter revenue from its refinery was $ 1.2 billion, compared to $ 48 million three years ago.

Delta ended the quarter with 12.8 billion in liquidity.

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

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