Delta Air Lines reported a significant improvement in earnings in the first quarter and expects strong results for the rest of the year. Adjusted earnings were $380 million, up 75% from the previous year and beating Wall Street analysts’ forecasts. Despite a 2% decrease in average revenue per passenger mile, revenue reached $12.6 billion, a record for the first quarter. It predicted record revenue for the second quarter, although profit margins are expected to be thinner.
Delta was less affected by the Boeing 737 Max issues compared to its rivals, as it does not currently have any of these jets in its fleet. The airline expects a challenging quarter for the US airline industry, with all major carriers forecasted to report losses due to flat to lower fares and rising costs. However, Delta’s CEO Ed Bastian remains optimistic about strong demand going forward, citing record booking days and strong demand for business travel.
The safety concerns surrounding the Boeing 737 Max have affected the aviation industry, with recent incidents adding to passenger worries. Despite this, Bastian emphasized that safety is a top priority for Delta and that US aviation travel is the safest form of transportation. Delta has not taken delivery of a Boeing jet since 2019 and has ordered 100 Boeing 737 Max 10 jets, but delivery dates remain uncertain due to Boeing’s safety and quality control issues.
The Federal Aviation Administration has not yet certified the Boeing 737 Max for passenger flights, leading to uncertainty about when Delta and other airlines will receive their orders. United Airlines CEO Scott Kirby announced that they were no longer counting on the 737 Max 10 planes they had ordered due to safety concerns. Delta’s CEO expressed confidence in eventually receiving the Max 10 jets but acknowledged that delivery timelines are unknown. Delta’s shares gained 4% in premarket trading following the positive earnings report.
In conclusion, Delta Air Lines has reported strong earnings in the first quarter and expects continued growth for the remainder of the year. Despite challenges in the industry, the airline remains focused on safety and meeting customer demand. The uncertainty surrounding Boeing’s 737 Max certification has impacted delivery schedules for Delta and other airlines, but the company remains optimistic about the future. Overall, Delta’s performance indicates resilience in a competitive and evolving aviation market.
