Delta Air Lines Sees Snapback to Pre-Pandemic Levels

By Reuters
Reuters
Reuters
June 2, 2022 Updated: June 2, 2022

Delta Air Lines Inc. said on Wednesday it expects second-quarter adjusted revenue at 2019 levels as pandemic-weary travelers are planning more leisure trips undeterred by the higher prices of tickets, accommodation, and rental cars.

U.S. airlines have been buoyed by how quickly travel snapped back from the depths of the pandemic, leaving them struggling to add capacity in part due to staff shortages.

Staffing issues, weather-related problems, and COVID-19 cases among employees caused airlines to cancel more than 2,500 flights over the Memorial Day holiday weekend.

However, airlines have remained bullish with an eye on strong summer travel demand.

Delta raised its operating margin outlook for the current quarter to 13 percent–14 percent, compared with its previous outlook of 12 percent–14 percent.

The Atlanta-based company expects second-quarter free cash flow of $1.5 billion and adjusted net debt below $20 billion, the airline said in a presentation to investors.

However, higher fuel prices stemming from the Ukraine conflict have caused Delta to raise its outlook for fuel price per gallon. The company now expects fuel price per gallon to be between $3.60 and $3.70, compared with its previous forecast of $3.20 to $3.35.

Last week, Southwest Airlines Co. and JetBlue Corp. Airways also gave upbeat revenue forecasts for the current quarter.

By Aishwarya Nair

Reuters