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Delta records post-pandemic profit of $650m

written by Isabella Richards | July 15, 2021
A350 Delta Air Lines (Delta Air Lines)

Delta Air Lines has announced its June quarter financial results ahead of competitors, in which it reported a profit for the first time since the pandemic hit.

On Wednesday, the Atlanta-based company announced a profit of US$652 million after a five-quarter streak of losses, with a GAAP pre-tax revenue of US$7.13 billion.

The company’s chief executive, Ed Bastian, claimed domestic leisure travel demand has “fully recovered to 2019 levels”, with the company also seeing an uptick in international and business travel, in the earnings release statement.

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“We achieved significant milestones in the quarter including a solid pre-tax profit in the month of June, positive free cash flow for the June quarter, and our people and our brand being recognised with the top spot in the J.D. Power 2021 Airline Study,” he said.

By the end of the quarter, Delta had US$17.8 billion in liquidity while paying off financial lease obligations of US$29.1 billon (net US$18.3 billion) from government aid and offsets.

Delta still saw major pre-tax loss of US$881 million, but the company forecasts less loss and more revenue through a “capital-disciplined” approach for the next quarter.

Delta Air Lines announced a $12.4 billion loss in 2020, marking the worst year in the company’s history.

In light of increasing travel demand off the back of a successful vaccine rollout, the airline also plans to hire over 1,000 pilots by next summer, after many were made redundant.

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Bastian told CNBC in an interview that the carrier hasn’t “seen any impact at all” on bookings from the Delta variant of COVID-19.

“With the recovery picking up steam, we are making investments to support our industry-leading operation,” Bastian said. “We are also opportunistically acquiring aircraft and creating upside flexibility to accelerate our capacity restoration in 2022.”

In response to demand, the airline recently announced its acquisition of seven Airbus A350s and 29 Boeing 737-900s into its fleet.

American Airlines and Southwest Airlines are also expected to announce June quarter financial results next week.

American on Tuesday announced it forecasts a “slight” pretax profit for the second quarter, likely reporting a net loss of US$35 million and net profit of US$23 million.

“We are clearly moving in the right direction,” CEO Doug Parker and president Robert Isom said in a staff note, according to CNBC.

The Wall Street Journal predicted earlier this week a loss of US$1.38 per share, which Delta announced a loss of US$1.07 per share.

The WSJ also expected US$6.22 billion in revenue, compared with the company’s US$7.13 billion in revenue.

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