Delta hikes sales forecast to pre-pandemic levels as demand and fares rise

Delta airplanes are seen at John F. Kennedy International Airport during the spread of the Omicron coronavirus variant in Queens, New York City, U.S., December 26, 2021.

Jeenah Moon | Reuters

Delta Air Lines expects its revenue to return to 2019 levels this quarter thanks to a surge in travel demand and higher fares that helped it cover a jump in fuel costs, the carrier said in a filing Wednesday.

The Atlanta-based airline updated its forecast less than a week after announcing it would trim its schedule to try and stem flight disruptions that impacted tens of thousands of passengers last month. The airline had been more conservative about expanding its schedule compared with competitors.

Still, hundreds of flights operated by Delta and other airlines were canceled or delayed over the key Memorial Day weekend.

Delta had previously forecast sales to be as much as 7% below pre-pandemic levels. The company also raised its margin outlook for the second quarter despite higher costs for fuel and other expenses.

Its shares were down more than 3% in morning trading. Other carriers were also trading lower.

Consumers have shown they are willing to shell out more for airline tickets after holding off on travel for two years during the pandemic. In some cases, demand returned more quickly than carriers expected. That prompted airlines including Southwest, JetBlue, Spirit and Alaska to trim their schedules to account for challenges from staffing shortages and bad weather.

American Airlines has been more aggressive than Delta and United in restoring capacity to pre-pandemic levels. In a message to staff on Tuesday, the company said that it managed to perform relatively well over the holiday weekend despite operating a flight schedule that was 28% bigger than its closest competition.

David Seymour, American’s chief operating officer, stressed the importance of delivering on reliability as more and more people return to air travel.

“Key to our success this summer and beyond is running a reliable operation,” he wrote

Source: https://www.cnbc.com/2022/06/01/delta-raises-revenue-forecast-on-higher-demand-and-fares.html