COVID Relief Fund helps Delta avoid $678 million in lost revenue

According to the Associated Press, Delta Air Lines avoided a quarterly revenue loss of US$678 million through US$1.5 billion in federal pandemic relief funds. This is the first quarterly profit reported by the airline since the 2020 COVID-19 pandemic caused severe damage to the industry.

Delta Air Lines said on Wednesday that the company made a profit of $652 in the second quarter, but federal funds and other one-off events helped it avoid a larger adjusted loss. Although the airport crowd is close to the level of 2019, the airline’s operating income is still only half of the original, and Delta Air Lines expects that costs will rise as it continues to recover from the effects of the pandemic.

“We still have a long way to go, but compared to 90 days ago, our business is in much better shape,” CEO Ed Bastian said in an interview. “We achieved substantial profits in June, which bodes well for our direction this summer.”

For more reports from the Associated Press, please see below.

Bastian predicts that the airline-which lost more than $12 billion last year-will be profitable in the third and fourth quarters, with revenue in the third quarter falling by 30% to 35% compared to 2019.

Delta Air Lines is the first American airline to publish data for the June quarter.

Delta Air Lines is the most profitable American airline in the pandemic, and it is likely to appear in or near the virus outbreak. Other operators also look healthier.

As federal relief helped airlines pay their wage costs, Southwest Airlines realized a small profit earlier this year. American Airlines It may do the same thing when it announces its second-quarter results on July 22. Allegiant Air, a discount airline that caters to holidaymakers, said on Tuesday that it carried more passengers than the same period in 2019 in the past three months.

Delta Air Lines stated that domestic leisure travel has fully recovered from the pandemic. According to the US Transportation Security Administration, on average, more than 2 million people flow through US airports every day.

However, business and international travelers are still mostly absent, and these two are very important for Delta Air Lines, American Airlines and United AirlinesThey will become even more important once the summer leisure travel ends and the federal pandemic relief expires on September 30.

Business travel shows signs of life. Delta Air Lines estimates the second quarter is 40% of the normal level, higher than the first quarter of 20%, Bastian expects to reach 60% in September.

International travel is still deeply frustrating. Bastian said that once Americans were allowed to visit many places there, bookings to the European continent would surge. But the United Kingdom still mainly prohibits Americans from entering, and the United States still prohibits most foreigners from entering, so Delta Air Lines only offered half of the normal number of transatlantic flights this summer.

Bastian believes that the COVID-19 variant is the biggest threat to the emerging travel recovery. Bastian said concerns about these variants delayed the reopening of international borders, but had no effect on domestic bookings-even though the number of virus cases in the United States has doubled in the past three weeks.

The labor shortage has also hit the aviation industry.

Bastian said the airline has enough staff to operate flights, but contractors that provide catering, cabin cleaning and other services at the airport are facing shortages, while reservations staff need to deal with a “surge in call volume.” On social media, airline customers often complain about being shelved.

“In the past four months, we have hired nearly 1,600 reservation staff, and we will continue to recruit until we reach the level of service and call to wait where they need it,” he said.

Delta Air Lines’ adjusted loss was $1.07 per share, better than Wall Street’s expectations. Analysts surveyed by FactSet expect a loss of $1.38 per share.

Excluding fuel refinery sales, revenue was US$6.3 billion, which was US$100 million better than analysts’ expectations, but it was still 49% lower than the second quarter of 2019-2020 was a cause of failure. This year’s performance is compared with last year.

Due to the reduction in labor, Delta Air Lines reduced labor and profit sharing costs by 36%, or more than $1 billion. Compared with 2019, its fuel expenditure has been reduced by 31%, or US$804 million.

The airline is also buying more planes. On Tuesday, Delta Air Lines stated that it would purchase or lease 36 second-hand Boeing and Airbus aircraft, apparently taking advantage of the low price advantage of the second-hand aircraft market.

Delta Air Lines’ stock price was basically flat on Wednesday.