Delta Climbs Back to Profitability, Reporting $216 Million Pre-Tax Income

Joe Cortez October 13, 2021

Delta Air Lines says they are once again profitable, with many loyalty program metrics showing positive signs.

For the first time in nearly two years, Delta Air Lines is giving investors positive news about their financial performance.

On the quarter ending September 30, 2021, the airline reported a pre-tax income of $216 million, excluding a $1.3 billion net benefit related to the second Payroll Support Program extension by Congress.

SkyMiles Membership Continues to Grow, While Credit Card Spending Recovers

While airline chief executive Ed Bastian touted revenues returning to just 33 percent under 2019 levels, he was equally optimistic about Delta SkyMiles. After the airline extended all elite member statuses through the beginning of 2023, the leader touted the increased engagement with the program, ultimately leading to a “sustained revenue premium to the industry.”

In addition, Bastian noted that spending on Delta-cobranded American Express cards were increasing once again. While saying the consumer issues significantly contributed to the positive numbers, it was evidence of the “customer-centric strategy and people-first approach” the airline has been cultivating since the beginning of the pandemic.

“Our Delta American Express card brand program continues to show strong resilience with card acquisitions nearly 95% restored in card spend, 115 percent recovered to 2019 levels,” said Bastian, as quoted by a Seeking Alpha transcript. “As a result, remuneration from American Express in the September quarter exceeded 2019 levels, totaling just over a billion dollars in the quarter. Demonstrating the durability of our brand preference as we continue to deepen our customer relationships.”

In total, loyalty-based revenues have restored to 80 percent of pre-pandemic levels. Bastian told investors and analysts that flyers are “joining SkyMiles at a faster rate than the passenger recovery,” with sign-ups fully recovered compared to 2019.

However, there are still challenges ahead for the carrier. Based on surveys of SkyMiles members, consumers say they are optimistic about returning to travel in the coming year, but the business travel will take a longer recovery. In addition, rising fuel prices will challenge the carrier’s profitability for the remainder of the year.

To maintain flexibility, the carrier is planning to stay flexible in their recovery operations and continue fleet renewal plans into 2022. Delta now expects to receive the firm order of 55 Airbus A321neo aircraft between 2022 and 2027, while next generation aircraft will make up 25 percent of their wide-body fleet by Summer 2021.

“These savings will continue to scale in future years as we take to delivery of next-generation aircraft, restore flying volumes, and further simplify the fleet,” said chief financial officer Dan Janki, as quoted in the transcript. “With these actions, we are unlocking efficiency gains, while also improving the product and customer experience.”

Delta First Airline to Share Third Quarter 2021 Results

With the call, Delta is the first of the major carriers to share their financial results for the quarter. United Airlines will share their results on Tuesday, Oct. 19, while American Airlines will share their numbers on Thursday, Oct. 21.