Delta Air Lines has reported operating revenue of $13.8bn and operating income of $1.5bn with operating margin of 11.0 percent for the June quarter. The airline’s operating cash flow was $2.5 billion with total debt and finance lease obligations reaching $24.8bn. Delta state that 82% of capacity was restored during the June 2022 quarter compared to pre-Covid levels.
"With growing demand across our network in the June quarter, we recaptured higher fuel prices and delivered adjusted revenue recovery of 99 percent with unit revenues up 20.5 percent versus 2019. We also delivered another record quarter of American Express co-brand remuneration, up 35 percent from the June quarter 2019, reflecting growing brand preference and further diversification of our revenue base," said Glen Hauenstein, Delta's president. "With sustained strength in bookings, we expect September quarter revenue to be up 1 to 5 percent compared to 2019 with total unit revenue growth improving sequentially."
Ed Bastian, Delta's chief executive officer, confirmed for the September quarter, Delta expects “an adjusted operating margin of 11 to 13 percent, supporting our outlook for meaningful full year profitability."
Domestic continues to lead Delta’s recovery with international accelerating. Domestic passenger revenue was 3 percent higher and international passenger revenue was 81 percent recovered compared to the June quarter 2019. Revenue in Latin America and Transatlantic both exceeded 2019 levels in the month of June and the pace of recovery in the Pacific saw meaningful improvement, driven by Korea and Australia re-openings and the easing of restrictions in Japan.
Delta also reported that business recovery was progressing with domestic corporate sales for the quarter were ~80 percent recovered versus 2019, up 25 points compared to the March quarter. International corporate sales for the quarter were ~65 percent recovered versus 2019, up 30 points compared to the March quarter, driven by outsized improvement in transatlantic. Recent corporate survey results show positive expectations for business travel in the September quarter, including optimism around international travel given the elimination in June of the pre-departure test requirement for flights to the US.
"Our June quarter non-fuel unit cost performance of up 22 percent compared to 2019 was impacted by lower capacity, higher selling-related expenses and investments in operational reliability," said Dan Janki, Delta's chief financial officer. "We remain confident in our ability to meaningfully improve our unit costs as we fully scale the network and return our operations to Delta's high standards. In the near-term, as we prioritize restoring reliability, our full year non-fuel unit cost will remain higher than our previous plan by approximately 8 points on 5 points less capacity."
Delta also repaid $1 billion of gross debt in the June quarter after delivering strong profitability and “generating free cash flow ahead of our expectations”.