Delta Air Lines is reporting a loss of $408 million for the final quarter of 2021, pulled down by the COVID-19 boom that shook the airline in December, and forced the carrier to start travel in the spring and summer. Another quarterly loss is expected first.
Delta Air Lines lost $408 million in the final quarter of 2021, dragged down by a COVID-19 surge that shook the airline in December, and the carrier predicted Thursday that it will have to travel in the spring and summer before There will be another quarterly loss.
CEO Ed Bastian said 8,000 employees have contracted COVID-19 in the past four weeks. More than 2,200 flights have been canceled since December 24 due to sick workers and winter storms.
Cancellations have fallen sharply over the past few days, but faster flights have cost the airline $75 million and the latest outbreak caused by the Omicron version of the virus is expected to push back the industry’s recovery by two months.
“I don’t think we’re going to see any pickup in bookings or travel during January and probably the first half of February,” Bastian said in an interview. “It’s always the weakest part of the year, and it’s going to be so vulnerable because of Omicron. We need the faith to return to the journey once the virus subsides.”
Delta expects omicron infections to peak over the next few days and then decrease rapidly as in South Africa and – more slowly – in the United Kingdom.
O’Micron has taken a long, slow increase in travel and has turned it upside down. So far in January, the number of people flying into the US is down 20% from the same month in 2019 – worse than the 16% drop in November and December.
Delta expects to lose money entirely in January and February, and in the first quarter.
The airline expects first quarter revenue to be 72% to 74% of pre-pandemic levels – similar to the fourth quarter. Costs are expected to rise rapidly. Costs other than fuel will increase by about 15% from 2019, and jet fuel is also getting costlier.
However, the Atlanta company expects to return to profitability in March — when spring break could help fill planes, especially if coronavirus infections are falling — and for the rest of 2022.
Delta believes it will hire several thousand people this year, Bastian said, as it rebuilds from the pandemic and expects what will be a busy summer. The company set aside $108 million for a special profit-sharing payout of $1,250 for each current employee.
Thanksgiving pay for employees comes as a new clash between largely non-union Delta and the nation’s largest flight attendants union. The union accused Delta of pressuring employees to return to work too soon after contracting the virus.
Delta last month lobbied the US Centers for Disease Control and Prevention to reduce the recommended quarantine period for people contracting the virus from 10 days to 5 days, with Bastian and other Delta officials saying that the 10-day standard” could have a significant impact on our workforce and operations.”
The CDC made the change, with its director Rochelle Valensky explaining on NPR that “we … began to see challenges with airline flights and other sectors.”
Sarah Nelson, president of the Association of Flight Attendants, said Delta lobbied the CDC after it was slow to offer incentive pay to employees to take on extra work during the holidays as infections spread.
Delta disputes the union’s claims, and the airline’s top lawyer sent a cease-and-desist letter to the union last week, accusing the group of making “false and defamatory” statements about the company.
Delta’s fourth-quarter loss compared to a $1.1 billion profit in the same quarter before the pandemic.
Excluding losses on certain investments and profit-sharing, Delta earned $170 million, or 22 cents per share. It easily tops estimates of 14 cents per share on Wall Street, according to a FactSet survey.
Revenue was $9.47 billion, down 17% from $11.44 billion in the fourth quarter of 2019, but higher than the $9.02 billion estimated by industry analysts.
David Koenig can be reached at www.twitter.com/airlinewriter