On Wednesday, Delta Air Lines reported second-quarter revenue that surpassed expectations. It is a sharp turnaround for the company, which reported a record loss of $12.4 billion in 2020.
The airline posted a profit of $652 million, breaking a five-quarter streak of losses, thanks to federal coronavirus aid. The funds allocated by the federal government helped to offset some of its costs.
The Atlanta-based airline expects to be profitable for the second half of 2022 without the benefit of federal aid. While still hamstrung by weak international travel, revenue will continue to improve compared with recent months according to the airline. For the third quarter of the year, the company expects revenue will be down 30% to 35% over 2019. The revenue of Delta Air Lines in 2019 was $12.56 billion. Delta as well as some other airlines often compare their results to the period before the pandemic. The pandemic created a dramatic shift in demand in 2020.
Delta said domestic leisure travel completely recovered and that business travel demand was also recovering. Average daily net cash sales doubled over the first quarter and were 20% higher than Delta’s initial forecast.
The sharp rise in demand caused certain issues. Thousands of employees took leaves of absence or early retirement packages in 2020. As a result, some airlines are struggling to find pilots, customer service agents, and other employees. Delta said last month it will ramp up the hiring of more than 1,000 reservation agents and plans to hire roughly 1,000 pilots in 2022.
The Air Line is the first of the U.S. carriers to report second-quarter results. American Airlines, Southwest Airlines, and United Airlines are scheduled to report their results next week.
Revenue for the second quarter that ended on June 30 came in at $7.13 billion. It fell 43% from the $12.54 billion the airline generated during the same period in 2019. Nevertheless, the revenue for the second quarter surpassed expectations. One of the major airlines had $17.8 billion in liquidity at the end of the quarter and total debt and lease obligations of $29.1 billion. Its gross capital expenditures would total around $3.2 billion in 2021.
The airline said its capacity in the third quarter will be down 28% to 30%. Delta’s capacity fell 32% in the second quarter, though it was blocking the middle seats until May 1.
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