Delta Airlines said that the high number of infections with the omicron mutation from the Corona virus will push it to record a loss during the first quarter of the year, but it still expects that it will return to profit this year due to the strong demand for travel and tourism.
Airlines, including Delta, canceled more than 20,000 US flights from Christmas Eve through the first week of the new year. Delta said in its results report that its business has started to stabilize and Omicron has resulted in only 1% of its flight cancellations in the past week, compared to other companies that have been hit hard by crew injuries and bad weather. Read more [Jetblue Cancels About 1,280 Flights Due to Omicron] and [Omicron Affects Airlines, Cancels Hundreds of Reservations].
Delta’s fourth-quarter sales, which amounted to $9.47 billion, beat analysts’ expectations, which came in at about $9.21 billion, while overall revenue was 17% lower than the $11.44 billion that the company recorded during the last three months of 2019, just before the start of the Corona pandemic.
Looking at the stock market, we notice that the Delta share increased by more than 3% in the afternoon trading, while the shares of United and American rose by more than 4%. Read more [Airlines Shares Rise Despite Flight Cancellations].
Delta posted a net loss of $408 million in the fourth quarter after higher fuel prices and other expenses spurred by the turmoil caused by the Omicron outbreak. Adjusted, Delta posted a profit of 22 cents, beating Wall Street expectations of 14 cents.
For the full year, Delta posted a profit of $280 million, posting its first profit in two years, thanks to the $4.5 billion federal financial assistance in airline labor expenses during the crisis, knowing that in 2020, after the demand for travel plummeted, and Delta posted its biggest ever loss of $12.4 billion. Read more [Delta’s record profits turn into a record loss within a year].
Delta expects first-quarter revenue to be 24-28% lower than in 2019 with operating capacity 15-17% lower than 3 years ago, and a 15% jump in expenses compared to 2019 excluding fuel.