Delta sees profit later this year as it posts another dismal quarter

Delta said its move to stop blocking middle seats could result in a sequential improvement in revenue

Delta Air Lines posted a bigger-than-expected loss for the first quarter on Thursday, while also forecasting a return to profitability later this year as more people get vaccinated and start traveling again.

Air travel, stifled by the COVID-19 pandemic, is widely expected to rebound in the second half of 2021 as wide vaccine rollouts encourage travel and drive summer bookings.

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"A year after the onset of the pandemic, travelers are gaining confidence and beginning to reclaim their lives," Delta Chief Executive Officer Ed Bastian said in a statement.

Delta also expects positive cash generation for the quarter ending June. It expects adjusted revenue for the period to fall between 50% and 55% from two years ago, but the drop would be less than the over 60% decline in the first quarter.

Planes belonging to Delta Air Lines sit idle at Kansas City International Airport on April 03, 2020 in Kansas City, Missouri. (Photo by Jamie Squire/Getty Images)

The carrier’s June-quarter adjusted revenue came in at $12.5 billion in 2019, which translates to at least about $5.62 billion in the same period this year, according to Reuters calculations.

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Analysts on average expect revenue of $6.22 billion for the June quarter, according to IBES data from Refinitiv.

The carrier said its move to stop blocking middle seats on May 1 could result in a sequential improvement in revenue.

The Atlanta-based company anticipates getting about $2.7 billion in the second quarter from the U.S. Treasury under its payroll support program.

Delta said its average daily cash burn slowed to $11 million per day in the first quarter ended March 31 from $12 million per day in the previous quarter.

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Total operating revenue fell 60.4% to $4.15 billion compared with the same period in 2019, and adjusted net loss was $2.26 billion, or $3.55 per share.

Analysts on average had estimated a loss of $3.17 per share on revenue of $3.91 billion.

Delta said its June-quarter adjusted pre-tax loss is expected to narrow to between $1 billion and $1.5 billion. 

(Reporting by Praveen Paramasivam and Ankit Ajmera in Bengaluru; Editing by Devika Syamnath, Bernard Orr)