An Airbus A330-323 aircraft operated by Delta Air Lines.
Benoitessier | Reuters
Delta Air Lines On Wednesday, it reported quarterly profits thanks to travelers who are willing to pay to fly, more than compensating for higher costs.
The carrier also vowed to improve credibility after increased delays and cancellations prompted it. Shrink That summer schedule.
The aviation industry has been “insufficient in revenue for the past two years,” CEO Ed Bastian said on CNBC.Squawk Box“On Wednesday after the career announces the results.” We pushed too hard. It’s shrunk a bit … and it’s doing a great operation in July. “
Delta’s share price fell more than 5% in the afternoon trading after adjusted earnings fell below analysts’ expectations.Rivals’ share has also fallen more than the wider market that has since fallen. Inflation data It was higher than expected.
Airfare was one of the few declines in US inflation reports, with a seasonally adjusted 1.8% decline from May to June after a significant rise.
Delta is facing a backlog in training new staff, keeping its third-quarter capacity from 83% to 85% of 2019 levels and limiting expansion.
The company expects third-quarter profits and has repeated its full-year profitability forecasts.
Third-quarter sales are expected to increase by 1% to 5% compared to three years ago, costs are also increasing, and fares are expected to continue to rise.
This is the company’s way Conducted in the second quarter According to the average estimate compiled by Refinitiv, compared to what analysts expected:
- Adjusted earnings per share: $ 1.44 compared to the expected $ 1.73.
- Revenue: $ 13.82 billion compared to the expected $ 13.57 billion.
According to Delta Air Lines, demand for both business and leisure travel has increased, despite problems at the start of the summer travel season.Domestic corporate travel sales recovered 80% from before Covid pandemicAn increase of 25 percentage points from the first quarter of this year, it said.
Excluding fuel, Delta’s cost for each seat that flew a mile increased by 22% from 2019 in the three months to June 30. Fuel costs increased 41% from three years ago to $ 3.2 billion.
Due to the surge in travel demand, airlines posted a net profit of $ 735 million. Measuring how fares have risen, Delta flew 18% less capacity in the second quarter than it was in the same period in 2019, but earned $ 13.82 billion, 10% more than three years ago. I created it.
According to Delta Air Lines, domestic travel revenues increased by 3% and transatlantic travel improvements were also recorded.
Delta and other airlines are comparing results to 2019 to show progress towards returning to pre-pandemic performance.
Staff shortages exacerbate everyday problems such as bad weather and increase the rate of flight cancellations and delays.
Bastian said Delta has limited its capacity and has already improved performance.
“We spent about six weeks,” Bastian apologized to the customer for the confusion. “We have issued compensation and an appropriate level of apology.”
Delta has made it possible for travelers to change flights on major holiday weekends on July 4th without having to pay the fare difference. Abnormal waiver The airline said it allowed customers to avoid potential flight disruptions.
Airline executives and the Federal Aviation Administration Condemned each other’s staffing issues Contribute to the delay. Secretary of Transportation Pete Butigeg has publicly warned airlines that they are not ready for their summer trip.
The shortage of airport staff in Europe contributes to the travel turmoil that many passengers face long lines and lose their bags.
Delta recently had another charter just to return the bag to a customer who was stuck due to some of the operational problems that European airports had, “Bastian said. Stated. “We did that with our own nickel to meet again or to allow customers to sort the bags as soon as possible.”
According to Bastian, Delta has added 18,000 employees since the beginning of 2021 to 95% of its 2019 workforce.Delta has the same number of employees Take a buyout or early retirement Early pandemic packaging, efforts to reduce costs.
Last October, Bastian advertised the “merits of juniors” in hiring new employees.
“Nearly 20,000 people retired a year ago, so the top-end … many of the most experienced employees chose to retire, which gave young people the opportunity,” he said. I said at that time.
The carrier is in the process of training many new employees. It’s a headwind because it faces strong travel demand, but there are many inexperienced workers.
“The main issue we’re working on is not employment, but a bubble of training and experience,” Bastian said in a earnings call Wednesday.
Delta Air Lines said Wednesday that staff premiums and overtime will be $ 700 million this year, 50% more than in 2019.
Bastian said airlines need to hire more pilots, flight attendants and mechanics, and bookings and airport staffing are “mainly where we need them.”
Correction: Airfare fell by seasonally adjusted 1.8% from May to June. In previous versions, the percentage was wrong.