Delta Air Lines reported a quarterly profit of $735 million on Wednesday as strong demand during the start of the busy summer travel season helped the airline weather rising costs, with little sign of a slowdown anytime soon.
The airline said it expected some strength to continue into the fall, forecasting revenue from July to September to exceed revenue collected during the same period in 2019, even with seat capacity down 15 percent to 17 percent.
“With continued strength in bookings, we expect September quarter revenue to be up 1 percent to 5 percent compared to 2019,” Glen Hauenstein, Delta’s president, said in a statement.
The strength of the travel recovery has helped airlines overcome rapidly rising costs and a long slump from the pandemic, but has also challenged the industry, which has struggled to contain operational disruptions. Delta, for example, canceled about 3 percent of its flights last month, second only to American Airlines, which canceled 5 percent, according to FlightAware, a flight-tracking website.
Investments to improve operations and limited capacity helped drive a 22 percent increase in non-fuel costs for Delta in the quarter ending June, compared to the same period in 2019, the airline said. Jet fuel prices, which hit record highs in the spring, also appear to be easing somewhat.
The rebound is still irregular. Revenue from flights within the United States was up about 3 percent compared to the same three months in 2019, while revenue from international flights was still down about 19 percent, Delta said. Still, transatlantic and Latin American routes generated more revenue in June than in the same month of 2019, while flights across the Pacific continued to lag.
Corporate travel lags even further behind, with domestic business travel sales falling about 20 percent during the quarter compared to the same period in 2019 and international business flight sales falling about 35 percent.
Despite that disparity, Delta reported total operating income of $13.8 billion in the second quarter. On an adjusted basis, quarterly revenue was about the same as it was collected in the same period in 2019, the airline said. And Delta’s bet on premium seats and services appears to be paying off, with revenue from those offerings recouping more quickly than revenue from the main cabin.
Delta said its operating margin, a measure of profitability, was 11 percent in the second quarter, compared to 17 percent in the same period of 2019. For the third quarter of 2022, Delta expects to report an operating margin of 11 to 13 percent. .
American Airlines previewed its own quarterly results on Tuesday, saying it expected to report bringing in nearly $13.4 billion in revenue in the second quarter of this year, an increase of about 12 percent from the same quarter. in 2019. But costs increased, too. American said it expected to report spending about $4 a gallon on jet fuel, slightly more than it had forecast just a month ago. United Airlines and American are scheduled to report financial results next week. Southwest Airlines is scheduled to report later this month.