Delta Air Lines Expects to See Return to Profitability in 2022

Delta Air Lines announced on Thursday that it expects to see profits in the fourth quarter. It also expects a return to profitability by next year.

The airline foresees $200 million profit in the final quarter of 2021. This latest announcement is different compared to their October forecast. In October, Delta expected a “modest” loss in the last quarter of the year as airlines dealt with rising prices of jet fuel.

When Delta announced its forecast, fuel prices began to ease. At the same time, airline ticket bookings are looking better. So far, Delta sees “limited impact” coming from the omicron variant.

However, international bookings slowed for the rest of the airline industry. Different countries including the US announced travel restrictions. The US even updated its testing requirement for incoming travelers.

But even with the omicron variant, Delta remains optimistic. Delta’s CEO Ed Bastian said that “Omicron (is) not going to impact our holiday bookings”.

International travel is a lucrative source of income for airlines. Transatlantic routes in 2019 represented 17% of passenger revenues for major airlines in the US. In November, Delta reported a 450% jump in international bookings.

Holiday Travel

According to the AAA, 109 million people will travel 50 miles or more this holiday season. AAA sees the airline industry to have a 184% jump in the number of passengers from last year.

However, even if things are looking optimistic, the airline industry is currently dealing with different issues. One of the biggest issues concerning the airline industry is staffing shortages. This limits the available flights and could also limit their return to profitability.

Delta’s Meaningful Profitability in 2022

Delta had a net profit of $1.2 billion last quarter. The federal aid is one of the main reasons for this. For the fourth quarter, the airline expects to recover 74% of 2019 levels.

Delta also announced that it sees “meaningful profitability” in 2022. The airline targets seeing 90% of 2019 levels by 2022.

Delta’s chief financial officer Dan Janki said that “As our profitability improves, we are focused on reducing debt and strategically investing to build on our leadership position”.