Delta forecasts return to profit in current quarter
Delta Air Lines on Wednesday forecast returning to profit in the current quarter, after posting a smaller-than-expected quarterly loss, on the back of a booming travel demand, sending its shares higher.
The company said robust consumer demand not only translated into a “solid” profit in March, but is also allowing it to offset soaring fuel costs with higher fares.
→ Delta to Increase Frequencies Between Los Angeles and Sydney.
As a result, Delta said it expects to post a “meaningful” profit this year. In the quarter through June, it estimates to generate an adjusted operating margin in the range of 12% to 14% and “strong” free cash flow. Company revenue in the quarter is forecast to increase by about 14-18 points from a quarter ago.
“The demand environment that we have today is at a historic high,” Chief Executive Officer Ed Bastian told Reuters in an interview. “The last five weeks have been the strongest period of bookings that Delta has ever seen in our history.”
After a speed bump caused by the Omicron coronavirus variant, travel demand has roared back. U.S. passenger traffic has been averaging about 89% of the pre-pandemic levels since mid-February, according to Transportation Security Administration (TSA) data.
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