Delta Air Lines posted a net loss of $408 million in its final quarter of 2021 and warned of upcoming challenges as the Omicron variant drives a surge of COVID-19 cases.
The airline canceled more than 2,000 flights since Christmas Eve due to worker shortages and bad winter weather, CEO Ed Bastian said. Approximately 8,000 employees tested positive for COVID-19 over the last four weeks.
“While the rapidly spreading omicron variant has significantly impacted staffing levels and disrupted travel across the industry, Delta’s operation has stabilized over the last week and returned to pre-holiday performance,” Bastian said in a statement.
“Omicron is expected to temporarily delay the demand recovery 60 days, but as we look past the peak, we are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel,” he added.
In total, US airlines have canceled more than 31,300 flights since Dec. 24 according to tracking data from FlightAware. The total amounted to about 7% of their planned schedules over that period.
Delta cited higher costs from fuel and Omicron-related disruptions in its fourth quarter results. Shares rose 3% in early trading.
Executives expect the airline to post another loss in its first fiscal quarter of 2022 as Omicron saps travel demand in January and February. Despite the setback, Delta expects to achieve profitability for the full year, according to CFO Dan Janki.
“Despite expectations for a loss in the March quarter, we remain positioned to generate a healthy profit in the June, September and December quarters, resulting in a meaningful profit in 2022,” Janki said.
Delta’s fourth-quarter results topped Wall Street’s expectations. Adjusted earnings per share was 22 cents, topping an expected 14 cents. Quarterly revenue was $9.47 billion, beating a projected $9.21 billion.
In the first quarter, Delta projected its total revenue will be 72% to 76% of what it was in the same quarter prior to the pandemic. Flight capacities will be an estimated 83% to 85% of pre-pandemic levels.