Mon, 23 May 2022

ATLANTA, Georgia: With a business slowdown caused by a COVID-19 surge in December, Delta Air Lines lost $408 million in the final quarter of 2021.

This week, Delta predicted that it will suffer one more quarterly loss before travel picks up in spring and summer.

Delta CEO Ed Bastian said 8,000 employees have contracted COVID-19 over the last four weeks which, along with winter storms, have led to the cancellation of more than 2,200 flights since 24th December.

However, Bastian said cancellations have dropped sharply in the past few days, and there were only two coronavirus-related cancellations on January 12, though the latest surge caused by the Omicron variant of COVID-19 is expected to push the industry's recovery back by two months.

In an interview with the Associated Press, Bastian said, "I do not think we are going to see a pickup in bookings or travel during January and probably the first part of February. It is always the weakest part of the year, and it is going to be that much weaker because of omicron. We need confidence in travel returning once the virus recedes."

Delta predicts the Omicron surge will peak over the next few days and then decline gradually, as in South Africa and the UK.

Due to Omicron, in January the number of people flying in the U.S. dropped 20 percent from January 2019, worse than the declines in November and December of 16 percent.

Delta expects this quarter's revenue to reach 72 to 74 percent of pre-pandemic levels, about the same as the fourth quarter, noting that costs other than fuel will rise from about 15 percent compared to 2019, as jet fuel becomes more expensive.

However, Delta expects to return to profitability in March, especially due to college spring break.

Bastian added that Delta will hire several thousand new staff this year, including 100 to 200 pilots a month, and has allocated $108 million for special profit-sharing payments of $1,250 for every employee.

This thank-you payment to employees is in response to a conflict between the company and the largest union of flight attendants in the U.S.

The union, which has tried unsuccessfully to represent Delta workers, accuses the airline of pressuring employees to return to work too soon after contracting COVID-19.

Last month, Delta successfully lobbied the U.S. Centers for Disease Control and Prevention (CDC) to reduce the recommended quarantine period from 10 days to 5 days for vaccinated people.

Delta's fourth-quarter loss contrasts with a profit of $1.1 billion during the same quarter before the pandemic.

Peter McNally, an analyst at Third Bridge, told Associated Press, "They did make money on an adjusted basis, and Q1 is going to be a loss, not a shock. Business and international travel are still a long way off, but the outlook is about where we thought it would be."

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