A Delta Airlines Boeing 757-251 approaches Washington Ronald Reagan National Airport (DCA) in Arlington, Virginia on February 24, 2021.
Daniel Slim | AFP | Getty Images
Delta and its competitors continue to lose money but have become optimistic Improvement of bookings The more travelers vaccinated, the more travel restrictions and more Reopen attractions. The airline said domestic leisure bookings rebounded to about 85% from 2019 levels, although international and business travel remains depressed.
The Atlanta-based airline posted a net loss of $ 1.18 billion on revenue of $ 4.15 billion in the first quarter, beating analysts’ estimates for revenue of $ 3.91 billion. Revenue declined 60% compared to $ 10.47 billion in the first quarter of 2019. On an adjusted basis, Delta posted a loss of $ 3.55 per share, compared to a forecast of $ 3.17 per share .
Delta’s shares fell more than 2% in morning trading.
Bookings in March doubled from January, CEO Ed Bastian told CNBC’s “”Squawk on the street“However, he added that the demand for business travel for this time of year is only 20% of the norm.
“When I look at the first quarter, it became clear to us that our business has taken a turn,” said Bastian. “We have seen a huge increase in bookings over the past few months.”
Bastian said in an earnings release that the company expects “positive cash generation for the June quarter and sees a way to return to profitability in the September quarter as demand continues to recover”.
Here’s how Delta outperformed Wall Street expectations in the first quarter, based on Refinitiv’s average estimates:
- Adjusted earnings per share: a loss of $ 3.55 versus an expected loss of $ 3.17 per share
- Total sales: $ 4.15 billion versus expected $ 3.91 billion in sales
Delta was forecasting revenue of 50% to 55% for the second quarter over the same period in 2019, with planned capacity a third lower than two years ago. Spending reducing fuel costs will increase 6% to 9% this quarter, it said.
The airline is the last US airline to block center seats. This practice started earlier in the pandemic to make customers feel better about flying. Delta will be giving up this practice next month.
A study by the Centers for Disease Control and Prevention published on Wednesday said laboratory models could physically distance passengers on board Reduce exposure on the virus that causes Covid-19 by up to 57%. The study did not consider face masks that are required by the federal government on flights.
Bastian defended the decision to sell all seats on Delta’s planes and disagreed with the study’s conclusions as the researchers failed to enforce pandemic safety protocols.
“Our experts tell us that given the vaccination rates they are at and the demand for such a high vaccination rate, it is perfectly safe to sit in that middle seat,” he said.
The airline’s executives will be holding a call with analysts at 10 a.m. ET to discuss the findings.