Delta Air Lines (DAL) shares surged higher Wednesday after the carrier posted a narrower-than-expected first quarter loss, with a big boost in revenues, thanks to what it called a "strong rebound in travel demand" as the Omicron infection wave faded over the final month of the period.
Delta said its adjusted loss for the three months ending in March was pegged at $1.23 per share, up from a loss of $3.42 per share over the same period last year and xx of the Street consensus of a $1.29 per share loss. Group revenues, Delta said, surged 125% to $9.35 billion, well ahead of analysts' estimates of a $8.83 billion tally.
Looking into the current quarter, Delta said its sees double-digit revenue growth as travelers continue to book holiday and business trips, with overall capacity rising to around 84% of 2019 levels.
"With a strong rebound in demand as omicron faded, we returned to profitability in the month of March, producing a solid adjusted operating margin of almost 10%," said CEO Ed Bastian. "As our brand preference and demand momentum grow, we are successfully recapturing higher fuel prices, driving our outlook for a 12 to 14% adjusted operating margin and strong free cash flow in the June quarter".
"I would like to thank the Delta people, who once again enabled our best-in-class operational performance, provided an unmatched customer experience and continue to power our industry leadership each and every day," he added.
Delta Air Lines shares were marked 4.5% higher in early Wednesday trading immediately following the earnings release to change hands at $40.14 each.
Delta CEO Bastian told CNBC Wednesday that he hoped the White House would lift its pandemic-era mask mandate on planes and in airports, which is slated to last until April 18, but noted that demand would continue to improve even if it were to be extended.
Last month, Airlines for America, a lobby group representing the biggest U.S. domestic and international carriers, wants the Biden Administration to drop predeparture test requirements, following similar decisions in the U.K. and Europe, and says the current mandate requiring masks on planes and in airports, noting high levels of public immunity to Covid variants, vaccine and therapeutics availability and flight cabin air quality.
