Delta Airlines said Thursday that increasing the Omicron variant of Covid19 will result in losses in the first quarter but still expects to gain this year due to increased travel demand.
CEO Ed Bastian said omicron is expected to delay the recovery in travel demand by 60 days, forecasting losses for January and February and then revenue for March. What we are seeing in the booking data is that the president attacking over the weekend looks really strong… People are ready to travel.
United and American traded over 4% more. Delta provided $ 108 million in profit incentives for more than 75,000 employees, the first in nearly two years. In February 2020, Delta announced a record profit share for its employees of $ 1.6 billion, which ultimately reached 90,000.
Delta is the first US airline to publish its fourth-quarter results and provide a detailed forecast of the impact of the variable on its business. Omicron’s rapid rollout has hit theaters, restaurants, retailers, and grocery stores.
Airlines, including Delta, have collectively canceled more than 20,000 U.S
Bastian said about 8,000 Delta employees,
or about 1 in 10, have tested positive for COVID19 in the past four weeks. About 3,000 of its 67,000 employees in the United States have COVID19 at some point, said United Airlines CEO Scott Kirby on Monday, and in one day at its hub in Newark, New Jersey, a third of employees reached of the virus was recalled
Delta said in a statement that its business has remained stable and that omicron has caused the cancellation of only 1% of its flights in the past week.
“While the new alternative has yet to be implemented, it looks like the worst is behind us,” Bastian said in a telephone interview with analysts and reporters.
In the fourth quarter, Delta posted its highest revenue since the end of 2019, driven by strong vacation bookings and more business travel.
Sales of $ 9.47 billion exceeded analysts’ expectations of $ 9.21 billion. The company has not yet fully recovered from the Covid19 crisis. Revenue fell 17% from $ 11.44 billion in the last three months of 2019, before the start of the coronavirus pandemic.
”Bastian said in a note to employees Thursday. you continue to grow and provide unprecedented service to our customers, Among ongoing challenges, including one of the most challenging vacation environments we have faced,
Delta recorded a net loss of $ 408 million for the fourth quarter due to higher fuel costs and other costs, in part due to Omicron propagation interruptions. When adjusting for one-time items, Delta reported earnings per share of 22 cents, beating Wall Street’s expected 14 cents.
For the year as a whole, Delta reported $ 280 million in revenue, the first in two years, thanks to $ 4.5 billion in federal assistance for the cost of labor. airlines during the crisis. In 2020, after a drop in travel demand, Delta recorded its biggest losses: $12.4 billion.
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Investors have largely ignored Omicron’s impact on carriers. Shares of Delta are up 3.9% this year through Wednesday, while US and US stocks are up 6.3% and 3% respectively. In comparison, the SandP 500 fell 0.84%.
Delta expects first-quarter revenues to fall 24% to 28% from their 2019 lows with a capacity of 15% to 17�low the increase from three years ago. Costs are expected to increase by almost 15% compared to 2019, excluding fuel.
“Cost expectations are arguably the most important point for investors as airlines (not just Delta) continue to see higher-than-expected costs,” wrote analyst Conor Cunningham. aviation at MKM Partners. , in an investor note on Hu