Delta Posts Second-Straight Quarter of Losses in 2022 Q1 Report
Joe Cortez April 13, 2022
The Atlanta-based airline reported their 2022 First Quarter financial results on April 14, 2022, announcing an adjusted operating loss of $793 million on an adjusted operating revenue of $8.2 billion.
COVID-19 and Fuel Price Increases Blamed for Losses
In reporting their March quarter results, airline leaders pointed to two key issues resulting in their losses. First, the resurgence of the COVID-19 Omicron variant and BA.2 subvariant made travelers adverse to travel. Second, the sharp increase in jet fuel because of Russia’s invasion of Ukraine cut into the bottom line.
Despite these challenges, Delta chief executive Ed Bastian noted March 2022 ended positive because of a “Strong rebound in demand as omicron faded,” and “successfully recapturing higher fuel prices.” The carrier expects an operating margin of up to 14% in the second quarter of 2022.
Once again, the SkyMiles loyalty program was a bright spot for the legacy carrier. Airline leaders say Delta made $1.2 billion through their partnership with American Express, which was 25% higher than the same period in 2019. Delta now expects to bring in over $5 billion from credit card spending alone this year. The program also acquired a “record number” of new customers in the quarter, demonstrating “further upside” from business flyers.
“We continue to fortify our trusted consumer brand, demonstrated by loyalty and record engagement with our customers,” Delta president Glen Haustein told investors on the quarterly call, as transcribed by The Motley Fool. “The strength of our brand has never been greater and has been recognized by the Wall Street Journal, Fortune, Business Travel News, and many, many others.”
Airline leaders say the carrier is now in a “stronger relative position” than during the pandemic and believe they will be able to return to pre-pandemic numbers sooner rather than later. The carrier expects to exceed their 2019 financial performance in two years.
Delta’s Announcement Kicks Off Airline Earnings Season
With their report, Delta is the first of the major airlines to report their earnings for the first quarter of 2022. United Airlines will hold their first-quarter earnings call on April 20, 2022, while American Airlines will hold theirs the next morning.
I am not surprised. The Delta One on the 767-300 is a joke. Please rebrand to Delta ZERO. Also the lounges are a disaster especially JFK T4 C gates. 249 USD for a bottle of Moët Champagne? Really? Furthermore old, dirty, overcrowded. Never again!
I love Delta. Everyone who travels a lot experiences issues here and there. When I do, Delta always compensates me in some way. I used to fly a lot for business, but now that I am retired, I find I can keep some status with the Delta AMEX. I had a great conversation with a Delta rep the other day. We were talking about the basic rate. Now that I am in my 70s I never use that rate, but when I was younger and had a very limited budget, I just wanted to go, and it would have been great for me! I believe Delta goes out of its way to provide great service to all categories of people!
I think they are very delusional about the Strength of their Brand. Multiple years of horrible service do not make the brand stronger. They may be better than the competition but when business travelers return what will they do.
Don't forget the 4% pay raise that Delta handed out to employees. The past 2 quarter loses is just Delta to grab a headline, considering that Eddie is now denying and using a play on words that Delta didn't get a tax payer bail out 2 years ago. We're now going on 2+ years of the pandemic, as I hardly doubt that business travel will ever return to how it was pre March 2020.