After a bumpy year-end and start to 2022 with mounting flight cancellations and increasing Covid-19 cases, Delta Air Lines anticipates a return to "solid profitability" in March, with "significant demand" from pent-up consumer and business travel, executives said.
Delta's operations have stabilised in the past week with cancellations related to the omicron variant of Covid-19 affecting only about one per cent of flights, with only two on Wednesday, said Delta CEO Ed Bastian.
"While the new variant is not done, it appears the worst may be behind us," Bastian said.
"Given the high transmissibility and lower severity of omicron, this variant is likely to mark the shift in Covid-19 from being a pandemic to a manageable and ordinary seasonal virus, which should accelerate our path to a normalised environment. While the first 60 days of the year will be impacted, we are confident that the pace of travel recovery will resume its December trajectory as we move into President's Day weekend, and a strong spring and summer travel season are ahead of us."
For those first few months, however, the omicron case surge will affect business travel and international recovery the most as meetings are cancelled, office reopenings are postponed and countries put restrictions back in place, Bastian added.
He said he anticipates pre-tax losses for the carrier in January and February.
The company's business travel segment reported domestic passenger volume approaching 60 per cent of 2019 levels during the fourth quarter of 2021, according to Delta. That figure included both the managed corporate and small and medium enterprise sectors.
Delta reported fourth-quarter adjusted pre-tax income of $170 million, about $30 million shy of the $200 million projected just prior to the schedule disruptions experienced at the end of 2021. Adjusted operating revenue was $8.4 billion, which was a two per cent improvement over Q3 2021 revenue. The company also reported a full-year 2021 adjusted pre-tax loss of $3.4 billion on adjusted operating revenue of $26.7 billion. Capacity was restored to 79 per cent of 2019 levels as of the fourth quarter.
Fourth-quarter passenger revenue of $7.2 billion was 29 per cent lower than the fourth quarter of 2019.