The carrier reported a healthy profit for the third quarter after a busy summer. Competitors also seem confident despite economic turbulence.
Delta Air Lines said Thursday that it had high hopes for the last three months of the year after ending the busy summer season with a healthy profit.
The airline reported a $695 million profit over the three months that ended in September, despite rising costs and Hurricane Ian’s disruptions to travel. Still, Delta’s third-quarter result was less than half the profit it reported during the same period in 2019.
The airline reported record revenue for the third quarter, after making some financial adjustments. That adjusted revenue was up 3 percent compared with the same three months in 2019, while Delta expects revenue in the final three months of the year to be up 5 to 9 percent from the same period in 2019.
“The travel recovery continues as consumer spend shifts to experiences and demand improves in corporate and international,” Ed Bastian, Delta’s chief executive, said in a statement. “In this environment, we expect December quarter revenue growth to accelerate versus 2019 with an operating margin of approximately 10 percent.”
Airlines have said in recent weeks that demand for travel did not immediately slow as the summer came to an end and economic concerns grew, as some had feared. International and corporate travel, which have lagged in the recovery, have shown continued improvement.
By the end of September, Delta’s corporate sales were back to about 80 percent of 2019 levels, the airline said. Almost 90 percent of Delta’s business customers said they expected to travel as much during the final three months of the year as in the summer quarter, if not more, the airline said.
Delta said it lost about $35 million in revenue in the third quarter because of cancellations and other disruptions caused by Hurricane Ian, which devastated parts of the southeastern United States at the end of September. The airline expects to take a similar hit in the current quarter because of the hurricane.
American Airlines provided a preview of its results this week, saying that revenue was higher than expected in the third quarter. The airline reported that revenue was up 13 percent compared to the same period in 2019, above its previous forecast of a 10 to 12 percent increase. American is expected to announce its full results next Thursday.
Investors have been closely watching whether consumers will respond to rising prices and economic turmoil by pulling back on travel, but airlines say they haven’t seen much of a slowdown yet. Whatever effect that has on short-term travel demand, United Airlines said this week that it was confident about the longer-term outlook for international travel.
On Wednesday, United announced an ambitious schedule of flights for the summer of 2023, including new service to Stockholm, Dubai and Malaga, Spain. It said demand for travel to Europe this summer was up about 20 percent from the summer of 2019. Next summer, it expects demand to be up about 30 percent from 2019.
“United is offering the best of both worlds: We’re making it easier for our customers to visit the most popular cities in Europe, but we’re also expanding our reach to give travelers access to new places they haven’t yet experienced,” Patrick Quayle, a top United executive, said in a statement on Wednesday. “We expect another busy summer for international travel.”
Airlines’ service to Europe was hampered this summer by airport and airline staffing shortages. In August, Heathrow Airport in London limited the daily number of departing passengers because of a lack of workers. That cap is set to expire later this month. United said it was working closely with European airports to ensure that it could execute its plans.
Demand for travel to Europe has been especially strong. Delta said that was driven especially by leisure trips to countries such as Italy, Spain and Greece, and growing international corporate travel. Delta has said it plans to offer 8 percent more seats next summer than it did this summer and aims to have its network fully restored to 2019 levels by then.
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