A better-than-expected fourth quarter of 2022 (Q4 2022) has left Delta Air Lines well-placed to "deliver significant earnings" in 2023, according to chief executive Ed Bastian.
The carrier reported adjusted operating revenue of US $12.3bn for the final quarter, according to a company filing to the Securities and Exchange Commission SEC). The figure was 8% higher than for the same period in 2019, though the full-year figure of US $45.6bn came in 2% lower than 2019.
"As we move into 2023, the industry backdrop for air travel remains favourable and Delta is well positioned to deliver significant earnings and free cash flow growth. We expect to grow 2023 revenue by 15 to 20% and improve unit costs year-over-year, supporting a full-year outlook for earnings of US $5 to US $6 per share and keeping us on track to achieve more than US $7 of earnings per share in 2024," said chief executive Ed Bastian.
A pre-tax income of US $1.2bn in the quarter came with earnings per share of US $1.29 as the carrier continued its revival after the return to pre-pandemic travel demand.
"Strong demand through the quarter drove domestic total passenger revenue 7% higher versus December quarter 2019, with international passenger revenue up 5%," the carrier reported in its SEC filing.
Some of the revenue increase was likely down to higher fares, with the US government's latest consumer price index (CPI) showing inflation in the airfare sector topping 3% for the second month in a row ,despite the overall CPI falling for the sixth consecutive month.
Delta reported increased costs of doing business compared with 2019, with fuel up 40% and other expenses up 13%, It said it expects non-fuel spending to keep climbing, projecting a 3-4% jump over the first quarter of 2023, largely due to rising labour costs as the carrier engages in contract talks with pilots.