Delta Air Lines on Wednesday posted its first quarterly profit since the coronavirus pandemic began and said it expected to remain profitable for the rest of the fiscal year, as travel demand picks up on the back of speedy vaccinations.
Net income reached $652 million, or $1.02 per share, in the three months to June 30, helped by government aid for U.S. airline workers' salaries as well as a strong rise in quarterly revenues, which topped analyst estimates.
"The days of cash burn are behind us," Delta Chief Executive Officer Ed Bastian told Reuters.
"Domestic leisure travel has fully recovered to 2019 levels, and there are encouraging signs of improvement in business and international travel," he said.
Shares rose 1.55% to $41.97 in pre-market trading.
Delta's second-quarter adjusted operating revenue fell 49% to $6.35 billion from 2019, a marked improvement from the 60.4% slump in the first quarter and above analysts' average estimate of $6.22 billion.
Delta said it expects adjusted operating revenue for the September quarter to be down 30% to 35% from two years ago, with the midpoint at $8.47 billion, above a Refinitiv-IBES estimate of $8.23 billion.
Excluding items such as government payroll support, the company lost $1.07 per share in the second quarter.
As pandemic-weary people seek vacations, passenger traffic has reached its highest levels since March 2020, forcing U.S. carriers to hire more pilots and staff to support the recovery.
Delta said it hired several thousand people during the quarter and continues hiring.
Corporate travel volumes also showed continued improvement through the second quarter and could be 60% recovered by September as more offices re-open, Bastian said.
One segment that remains weak, however, is international travel as the United States continues to restrict entry to many travelers, including from Europe, one of Delta's biggest markets.
"Candidly it’s a source of great frustration for us,” Bastian said.
Delta is the first major U.S. airline to report second-quarter results.
Rival American Airlines said Tuesday that it could report a small profit in the second quarter, including special items like government aid.
(Reporting by Sanjana Shivdas in Bengaluru, Eric M. Johnson in Seattle and Tracy Rucinski in Chicago; additional reporting by Ankit Ajmera; Editing by Ramakrishnan M. and Steve Orlofsky) ((SanjanaSitara.Shivdas@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 1642; Twitter: @SanjanaShivdas;))