Delta Air beats revenue estimates on vaccination-led travel rebound By Reuters

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© Reuters. FILE PHOTO: Delta Air Lines planes are parked at their gates at Hartsfield Jackson International Airport in Atlanta, Georgia, U.S., October 27, 2020. REUTERS/Brian Snyder

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(Reuters) – Delta Air Lines (NYSE:) on Wednesday reported quarterly revenue above estimates and said it expected to remain profitable for the rest of the fiscal year, as travel demand picks up and international markets reopen on the back of speedy vaccinations.

Corporate volumes showed continued improvement through the second quarter due to higher demand in business-heavy markets like New York and Boston, Delta said, adding that it returned to profitability in the month of June.

“The days of cash burn are behind us,” Delta Chief Executive Officer Ed Bastian told Reuters.

“Domestic leisure travel has fully recovered to 2019 levels, and there are encouraging signs of improvement in business and international travel.”

Shares rose 1.55% to $41.97 in pre-market trading.

Delta said it expects adjusted operating revenue for the September quarter to be down 30% to 35% from two years ago, with the midpoint at $8.47 billion, above a Refinitiv-IBES estimate of $8.23 billion.

That would be a marked improvement from the 60.4% slump in operating revenue in the first quarter.

Delta’s second-quarter adjusted operating revenue fell 49% to $6.35 billion from 2019 but was above analysts’ average estimate of $6.22 billion.

Net income fell to $652 million, or $1.02 per share, in the three months to June 30 from $1.44 billion, or $2.21 per share, in 2019. But it was the company’s first quarterly profit since the pandemic began.

Excluding items, the company lost $1.07 per share in the second quarter.

U.S. carriers have been rushing to hire more pilots and staff as pandemic-weary people resume travel, driving passenger traffic to the highest levels since March 2020, when the COVID-19 crisis slashed demand.

Delta said it hired several thousand people during the quarter and continues hiring.

One segment that remains weak is international travel, with the United States continuing to restrict entry to many travelers, including from Europe, one of Delta’s biggest markets.

“Candidly it’s a source of great frustration for us,” Bastian said. (This story corrects comparative period for net income in second to last paragraph)

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