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The
Atlanta-based carrier expects a solid profit in the third
quarter as well, with operating margin estimated to be in the
range of 11%-13%. The No 3. U.S. airline by fleet size said
there is no evidence of a pullback in consumer demand.
It reported an adjusted profit of $1.44 per share for the second
quarter. That was below analysts' expectations of $1.73 per
share, according to Refinitiv, yet still marked the carrier's
best performance since 2019.
Revenue for the quarter through June came in at $13.8 billion,
topping Wall Street estimates.
"This is an industry that hasn't seen demand in a material way
for two years, and so we have a lot of consumers with a
tremendous urge and desire to travel," Chief Executive Ed
Bastian said in an interview.
American carriers are enjoying the strongest summer travel
season in three years as more people resume regular activities
including vacations, and the lifting of pandemic travel
restrictions has sent bookings soaring. International traffic is
on a rebound, while office reopenings are fueling corporate
travel demand.
U.S. passenger traffic is up 18% this summer from a year ago and
has been averaging about 89% of the pre-pandemic levels since
the Memorial Day holiday weekend in May, according to
Transportation Security Administration data, making for a
profitable second-quarter for most of the major carriers despite
inflationary pressure.
Rival American Airlines on Tuesday forecast its first quarterly
profit since the onset of the pandemic.
The NYSE Arca Airline index has fallen 22% since early May on
concerns that higher air fares, a worsening economic outlook,
persistently high inflation and rising interest rates could dent
travel spending in the second half of the year.
Delta, however, said fall travel bookings were strong.
"The demand is going to continue to hold fairly well through the
fall and into the winter," Bastian said.
The company expects third-quarter revenue to be up as much as 5%
from 2019, even as its capacity is projected to be down 15%-17%.
Non fuel operating expense for the quarter is estimated to be
22% above the 2019 level.
Delta said restoring operational reliability is its top
priority. The carrier's performance in recent weeks has been
marred by flight delays and cancellations caused by staffing
gaps, weather and air traffic control constraints.
The company said its performance in July, however, is off to a
good start. To ease a staffing crunch, the airline has deployed
hundreds of employees from its corporate offices at airports in
Atlanta and New York to assist with check-in and baggage
drop-off.
(Reporting by Rajesh Kumar Singh; Editing by Bill Berkrot)
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