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.
|DAL||DELTA AIR LINES INC.||39.31||-1.41||-3.46%|
"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.
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.
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.
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)