Delta Air Lines has reported adjusted pre-tax income of $216 million for the September quarter 2021, and operating revenue of $8.3bn, which excludes refinery sales, a 665 improvement versus September quarter 2019 on capacity that was 71% restored. Sequentially versus the June quarter 2021, adjusted operating revenue improved by $1.9 billion, or 30 percent, on an 11 percent increase in capacity.
Delta reports that total operating expenses decreased $3.5bn compared to the September quarter 2019. Remuneration from American Express in the quarter was just over $1bn.
The airline generated $151 million of operating cash flow and invested $619 million back in the business. At the end of the September quarter, the company had $15.8 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities.
"Our September quarter marked an important milestone in our recovery, with our first quarterly profit since the start of the pandemic," said Ed Bastian, Delta's chief executive officer. "Our revenues reached two-thirds of 2019 levels thanks to the industry-leading operational performance our people delivered through a busy summer, once again showing why they are the best in the business."
"While demand continues to improve, the recent rise in fuel prices will pressure our ability to remain profitable for the December quarter. As the recovery progresses, I am confident in our path to sustained profitability as we continue to provide best-in-class service to our customers, strengthen preference for our brand, while creating a simpler, more efficient airline."
"Generating a profit for the quarter even with a majority of our corporate and international customers still to return is a great achievement," said Glen Hauenstein, Delta's president. “I am also encouraged by our relative revenue performance, as we expect a record September quarter unit revenue premium.”
Delta is reporting robust holiday demand and an expected improvement in corporate and international demand, and now expects total December quarter revenue to recover to the low 70s percentage relative to 2019.
Cargo revenue also continued to improve – up to $262 million, a 39% improvement compared to the September quarter 2019. This represents the fourth consecutive quarter of growth compared to 2019 comparable periods. Delta expects cargo strength relative to 2019 to continue in the December quarter 2021 as constraints in global air cargo capacity during the peak holiday shipping period support continued yield strength.
"Leading the industry on operational performance and achieving our goal of profitability for the quarter with an adjusted pre-tax profit of $216 million are great accomplishments and a testament to the perseverance of the Delta people," said Dan Janki, Delta's chief financial officer. "Our focus remains on restoring the airline to prepare for the next leg of the recovery, building upon our leadership position for the years ahead."
At the end of the September quarter 2021, the company had total debt and finance lease obligations of $27.8 billion with adjusted net debt of $19.3 billion. The company's total debt had a weighted average interest rate of 4.2 percent at September quarter-end. In addition to maturities and normal amortization of nearly $184 million, the company completed a $1 billion debt tender offer, acquired aircraft with cash rather than financing those acquisitions and executed $276 million of open market debt repurchases in the September quarter 2021.
Since October 2020, Delta has reduced its financial obligations by $12 billion in aggregate via pension contributions and paydown of debt, including normal amortization.
Delta has announced the incremental acquisition of two used A350 aircraft with deliveries planned for the December quarter 2021. With this, Delta has now finalised several fleet transactions, including the exercise of 55 A321neo options scheduled to deliver between 2022 and 2027 and agreements to acquire 38 used aircraft in the secondary market.