Delta Air Lines Recorded a Profit in the First Quarter and Achieved Record Revenue for This Period. The Company Projects Earnings Per Share of $2.20 to $2.50 for the Second Quarter. CEO Ed Bastian Stated That Hiring Slowed Down After the Airline Aggressively Added Staff Following the Pandemic.
Despite ongoing inflation, bookings for leisure and business travel are strong as the peak travel season approaches, Bastian said. "Consumers continue to prioritize travel as an investment in themselves," Bastian said in an interview.
For the second quarter, Delta expects earnings per share of $2.20 to $2.50, while analysts had forecasted an average of $2.23 per share, according to LSEG, previously known as Refinitiv. Delta said that revenue in the current period could increase by up to 7%, which is above analysts' estimates. Delta also repeated its full-year outlook with earnings of $6 to $7 per share and a free cash flow of between $3 billion and $4 billion.
In the last quarter, business travel improved, and demand is expected to remain strong, executives said, pointing to a 14% growth in business travel sales figures. Particularly the technology, consumer, and financial services sectors were strong.
Delta, like other airlines, has slowed hiring after massively recruiting staff in the post-pandemic period and is focusing more on efficiency. Bastian told CNBC that the company's workforce is likely to increase by low single-digit percentages this year compared to 2023.
In the first quarter, the company achieved a profit of 37 million US dollars or 6 cents per share, compared to a loss of 363 million US dollars or 57 cents per share in the same period last year. The adjusted profit of 288 million US dollars or 45 cents per share increased from 163 million US dollars or 25 cents per share in the first quarter of 2023.
The revenue of $12.56 billion, adjusted for refinery sales, increased by 6% over the previous year and was slightly below analysts' expectations.
Delta's Unit Costs Excluding Fuel Rose by 1.5% Year-Over-Year. Delta stated that domestic revenue per unit increased by 3% compared to the previous year, as aircraft load factors reached record levels for the quarter, which is traditionally a quiet travel period. Airfares increased by 1% from February to March, but were down 7% in the last month compared to the same month last year, according to Wednesday's US inflation report.
"Growth is normalizing, and we are in a phase of optimization, with a focus on restoring our most profitable core hubs and achieving efficiency gains," said CFO Dan Janki in an earnings announcement.
