First quarter loss for Delta Air Lines of $793 million.......

• 
  
  

March quarter 2022 GAAP operating loss of $783 million and loss per share of $1.48 on total operating revenue of $9.3 billion

March quarter 2022 adjusted operating loss of $793 million and adjusted loss per share of $1.23 on adjusted operating revenue of $8.2 billion

With an improving demand environment, achieved a solid operating margin in the month of March.

Delta Air Lines reported financial results Wednesday for the March quarter 2022 and provided its outlook for the June quarter 2022.

"With a strong rebound in demand as omicron faded, we returned to profitability in the month of March, producing a solid adjusted operating margin of almost 10%. As our brand preference and demand momentum grow, we are successfully recapturing higher fuel prices, driving our outlook for a 12% to 14% adjusted operating margin and strong free cash flow in the June quarter,” said Ed Bastian, Delta’s Chief Executive Officer. “I would like to thank the Delta people, who once again enabled our best-in-class operational performance, provided an unmatched customer experience and continue to power our industry leadership each and every day.”

March Quarter 2022 Financial Results

• Adjusted operating loss of $793 million excludes a net gain of $9 million.

• Pre-tax loss of $1.2 billion with adjusted pre-tax loss of $1.0 billion, excluding a net expense of $164 million.

• Adjusted operating revenue of $8.2 billion, which excludes third-party refinery sales, was 79% recovered versus March quarter 2019 on capacity that was 83% restored.

• Total operating expense of $10.1 billion increased $679 million compared to the March quarter 2019.  

• Adjusted for costs primarily from third-party refinery sales, total operating expense of $9.0 billion decreased $400 million or 4% in the March quarter 2022 versus the comparable 2019 period.

• Generated $1.8 billion of operating cash flow and $197 million of free cash flow, after investing $1.6 billion into the business, primarily related to aircraft purchases and modifications.

• At the end of the March quarter, the company had $12.8 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities.

Revenue Environment

"Delta is well-positioned to capitalize on robust consumer demand and an accelerating return of business and international travel. The strength of Delta's brand has never been more evident with record-setting performance for co-brand card acquisitions, co-brand spend and SkyMiles acquisitions in March," said Glen Hauenstein, Delta's president. "In the June quarter, we are successfully recapturing higher fuel prices and expect our revenue recovery to accelerate to 93 to 97 percent with unit revenue up double digits compared to 2019."
Adjusted operating revenue of $8.2 billion for the March quarter 2022 was 79 percent restored to March quarter 2019 levels, 5 points ahead of the mid-point of the company's initial guidance. Compared to the March quarter 2019, total passenger revenue was 75 percent recovered on system capacity that was 83 percent restored.  Domestic passenger revenue was 83 percent recovered, and international passenger revenue was 54 percent restored in the March quarter. 
Consumer demand accelerated through the quarter, highlighted by strong spring break performance.  As omicron faded, offices reopened and travel restrictions were lifted, resulting in an improvement in business travel demand and a stronger fare environment.

Revenue-related Highlights:

Unit revenue exceeds 2019 levels in March month for the first time in two years: March quarter adjusted total unit revenue (TRASM) was 5 percent lower than the same period in 2019. As demand improved, March month adjusted TRASM inflected to positive versus 2019, marking the first month of positive unit revenue versus 2019 since the start of the pandemic. This strength was led by premium revenue and diversified revenue streams, including loyalty and cargo.
Business travel recovery boosted by improvement in corporate: Domestic corporate sales* for the quarter were ~50 percent recovered, with March improving to ~70 percent versus 2019. International corporate sales for the quarter were ~35 percent recovered, with March improving to ~50 percent versus 2019. Internationally, Transatlantic improved the most as European countries reopened.

Premium cabin revenue recovery outpacing Main Cabin: Premium products continued to lead the recovery with Domestic premium revenue approximately 100 percent restored to 2019 levels in the month of March. Domestic and Latin premium product revenue recovery outpaced Main Cabin by approximately 10 points during the March quarter.
 
*Corporate sales include tickets sold to corporate contracted customers, including tickets for travel during and beyond the referenced time period

American Express remuneration 25 percent higher than 2019 levels: American Express remuneration of $1.2 billion in the quarter was up 25 percent compared to March quarter 2019. Co-brand spend was up 35 percent compared to March quarter 2019, reflecting a significant increase in T&E spend, with air travel spend outpacing lodging in the month of March for the first time since 2019. Co-brand acquisitions were nearly 95 percent recovered compared to March quarter 2019.

Cargo strength continues with record revenue month in March: Cargo revenue was $289 million for the March quarter, a 51 percent increase compared to the same period in 2019 on strong demand and yields.

Cost Performance

"Thanks to the team's hard work, we maintained a competitive cost structure in the March quarter amid a dynamic operating environment, an important driver of our financial recovery," said Dan Janki, Delta's chief financial officer.  "As demand continues to recover and we restore additional capacity in the second half of the year, we expect our non-fuel unit cost comparisons to 2019 will improve to up mid-single digits, keeping us within our full year non-fuel unit cost guidance range. Our intense focus on non-fuel costs will serve us well moving ahead as we scale the airline and better utilize our fleet and our facilities."
Total adjusted operating expense of $9.0 billion in the March quarter 2022 increased 11 percent sequentially, driven by higher fuel prices and costs from the continued restoration of the airline. Adjusted fuel expense was $2.1 billion in the March quarter 2022. Adjusted fuel price of $2.79 per gallon was up 33 percent compared to the December quarter 2021 driven by higher market prices, including a 7¢ refinery contribution.
Adjusted non-fuel cost of $6.9 billion was up 6 percent sequentially. This was primarily driven by a normalization in maintenance expense. Compared to the March quarter of 2019, non-fuel unit costs (CASM-Ex) were 15 percent higher on 17 percent less capacity.

Balance Sheet, Cash and Liquidity

"During the March quarter we generated free cash flow, continued to pay down debt and finished the quarter with nearly $13 billion in liquidity," Janki said. "Reducing debt is our top financial priority as we target investment-grade metrics and $15 billion of adjusted net debt by the end of 2024."

At the end of the March quarter 2022, the company had total debt and finance lease obligations of $25.6 billion with adjusted net debt of $20.9 billion and a weighted average interest rate of 4.3 percent. During the quarter, the company repaid $1.4 billion of gross debt.

Operating cash flow during the March quarter 2022 was $1.8 billion. Free cash flow was $197 million for the quarter with $1.6 billion of gross capital expenditures reinvested in the business. The company's Air Traffic Liability was $9.1 billion at March quarter-end, up $2.8 billion compared to the end of the December quarter and up $2.5 billion compared to the March quarter 2019. 

Delta ended the March quarter with $12.8 billion in liquidity, including $2.9 billion in undrawn revolver capacity. 

Fleet and Partner Updates

In the March quarter, Aeroméxico emerged from its bankruptcy proceedings and in connection with the consummation of the transaction, Delta now holds a 20 percent equity stake in the reorganized company. Delta will recognize the 20 percent share of Aeroméxico's results under the equity accounting method within non-operating expense in the company's income statement beginning in the June quarter.

As part of Delta's fleet renewal initiatives, the company took delivery of its first A321neo aircraft at the end of March 2022 and expects to take delivery of 26 A321neos in total this year. The introduction of these next-generation aircraft to the fleet contributes to Delta's 2022 goal of using at least 6 percent less fuel per available seat mile compared to 2019. In total, Delta has committed to purchase 155 A321neos through 2027.

Other Highlights from the March Quarter 2022
Culture and People

Awarded a special profit-sharing payment of $1,250 to eligible employees in appreciation for extraordinary efforts resulting in a profitable second half of 2021
Announced a 4 percent base pay increase for eligible employees worldwide, effective May 1, 2022
Recognized by Glassdoor as one of its Best Places to Work for a 6th year in a row. Delta was the highest-ranking U.S. airline on the list and ranked No. 18 on the 2022 list of 100 large companies
Honored by Fortune as one of the World's Most Admired Companies for the 9th year in a row, and ranked higher than any other airline on the list
Hosted celebrations with employees and family of Team USA Olympic and Paralympic athletes traveling on Delta planes to and from the 2022 Winter Olympic Games in Beijing

Customer Experience and Loyalty

Ranked No. 1 U.S. airline by the Wall Street Journal, including the best performance in on-time arrivals, completion factor, preventing extreme delays and the lowest levels of U.S. DOT complaints
Unveiled major airport infrastructure milestones at Delta's Los Angeles and Seattle global hubs, as part of a $12 billion, decade-long effort to modernize and elevate the customer journey
Increased flexibility by extending ticket validity through year-end 2023 and rolling over all Medallion Qualification Miles from 2021 to 2022
Enhanced in-flight experience with the return of hot meals on flights over 900 miles in First Class, and introduced plant-based and vegetarian menu items
Reintroduced and refreshed Delta One services with multi-step, three-course meal service, more pre-departure beverage options, new cocktail bites and more dessert options
Announced summer service schedule to Europe, with more than 500 weekly flights to Europe, including new flights between New York-JFK and Stockholm, Salt Lake City and London-Heathrow and restarting service from New York-JFK to Zurich, Brussels, Edinburgh, Copenhagen and Prague

Environmental, Social and Governance

Released Diversity, Equity and Inclusion report outlining progress against the company's commitments to advancing racial justice and diversity within its business
Published a Climate Lobbying Report detailing global advocacy activities and policy engagements that support and complement Delta's Paris Agreement-aligned climate goals
Expanded partnership with sustainable aviation fuel (SAF) maker Gevo to increase supply of SAF and bring Delta closer to the goal of fueling 10 percent of its airline operation with SAF by the end of 2030
Announced collaboration with Airbus on industry-leading research to accelerate the development of hydrogen-powered aircraft
Created first Propel Collegiate Pilot Career Path Program with Hampton University, the airline's first such partnership with a historically Black university
Contributed $1 million to the American Red Cross and Global Red Cross Movement in support of humanitarian relief efforts in Ukraine
Launched new, more sustainable onboard products; together the new products are expected to reduce single-use plastic onboard by approximately 4.9 million pounds annually

Follow this site here.

DELTA AIR LINES, INC.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended
	March 31,
(in millions, except per share data)	2022	2019	$ Change	% Change
Operating Revenue:
Passenger	$                 6,907	$                 9,254	$                (2,347)	(25) %
Cargo	289	192	97	51 %
Other	2,152	1,026	1,126	NM
Total operating revenue	9,348	10,472	(1,124)	(11) %
Operating Expense:
Salaries and related costs	2,826	2,732	94	3 %
Aircraft fuel and related taxes	2,092	1,978	114	6 %
Ancillary businesses and refinery	1,382	351	1,031	NM
Contracted services	753	709	44	6 %
Depreciation and amortization	506	615	(109)	(18) %
Landing fees and other rents	504	524	(20)	(4) %
Regional carrier expense	491	538	(47)	(9) %
Aircraft maintenance materials and outside repairs	465	476	(11)	(2) %
Passenger commissions and other selling expenses	312	474	(162)	(34) %
Passenger service	275	288	(13)	(5) %
Aircraft rent	122	102	20	20 %
Restructuring charges	(5)	—	(5)	NM
Profit sharing	—	220	(220)	(100) %
Other	408	445	(37)	(8) %
Total operating expense	10,131	9,452	679	7 %
Operating (Loss)/Income	(783)	1,020	(1,803)	NM
Non-Operating Expense:
Interest expense, net	(274)	(83)	(191)	NM
Equity method results	—	(54)	54	(100) %
Gain/(loss) on investments, net	(147)	100	(247)	NM
Loss on extinguishment of debt	(25)	—	(25)	NM
Pension and related benefit/(expense)	73	(15)	88	NM
Miscellaneous, net	(44)	(22)	(22)	100 %
Total non-operating expense, net	(417)	(74)	(343)	NM
(Loss)/Income Before Income Taxes	(1,200)	946	(2,146)	NM
Income Tax Benefit/(Provision)	260	(216)	476	NM
Net (Loss)/Income	$                   (940)	$                    730	$                (1,670)	NM
Basic (Loss)/Earnings Per Share	$                  (1.48)	$                   1.10
Diluted (Loss)/Earnings Per Share	$                  (1.48)	$                   1.09
Basic Weighted Average Shares Outstanding	637	665
Diluted Weighted Average Shares Outstanding	637	667

DELTA AIR LINES, INC.
Passenger Revenue
(Unaudited)
	Three Months Ended
	March 31,
(in millions)	2022	2019	$ Change	% Change
Ticket - Main cabin	$                    3,448	$                    4,680	$                   (1,232)	(26)  %
Ticket - Premium products	2,538	3,308	(770)	(23)  %
Loyalty travel awards	543	692	(149)	(22)  %
Travel-related services	378	574	(196)	(34)  %
Total passenger revenue	$                    6,907	$                    9,254	$                   (2,347)	(25)  %
DELTA AIR LINES, INC.
Other Revenue
(Unaudited)
	Three Months Ended
	March 31,
(in millions)	2022	2019	$ Change	% Change
Refinery	$                    1,187	$                        48	$                    1,139	NM
Loyalty program	571	474	97	20   %
Ancillary businesses	209	321	(112)	(35)  %
Miscellaneous	185	183	2	1   %
Total other revenue	$                    2,152	$                    1,026	$                    1,126	NM

DELTA AIR LINES, INC.
Total Revenue
(Unaudited)
				Increase (Decrease)
				1Q22 vs 1Q19
Revenue		1Q22 ($M)		Change	Unit Revenue	Yield	Capacity
Domestic	$	5,563		(17)%	(12)%	(6)%	(7)%
Atlantic		539		(50)%	(25)%	(9)%	(33)%
Latin America		680		(21)%	(10)%	(1)%	(12)%
Pacific		125		(78)%	(31)%	72%	(69)%
Total Passenger	$	6,907		(25)%	(10)%	—%	(17)%
Cargo Revenue		289		51%
Other Revenue		2,152		NM
Total Revenue	$	9,348		(11)%	8%
Third Party Refinery Sales		(1,187)
Total Revenue, adjusted	$	8,161		(21)%	(5)%

DELTA AIR LINES, INC.
Statistical Summary
(Unaudited)
	Three Months Ended
	March 31,
	2022	2019	Change
Revenue passenger miles (millions)	38,700	51,617	(25)	%
Available seat miles (millions)	51,810	62,416	(17)	%
Passenger mile yield (cents)	17.85	17.93	—	%
Passenger revenue per available seat mile (cents)	13.33	14.83	(10)	%
Total revenue per available seat mile (cents)	18.04	16.78	8	%
TRASM, adjusted - see Note A (cents)	15.75	16.63	(5)	%
Cost per available seat mile (cents)	19.56	15.14	29	%
CASM-Ex  - see Note A (cents)	13.24	11.49	15	%
Passenger load factor	75 %	83 %	(8)	pts
Fuel gallons consumed (millions)	751	962	(22)	%
Average price per fuel gallon	$                 2.79	$                 2.06	35	%
Average price per fuel gallon, adjusted - see Note A	$                 2.79	$                 2.04	37	%

DELTA AIR LINES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
	Three Months Ended
	March 31,
(in millions)	2022	2019
Cash Flows From Operating Activities:
Net (loss)/income	$                   (940)	$                    730
Depreciation and amortization	506	615
Changes in air traffic liability	2,751	1,938
Changes in balance sheet and other, net	(546)	(1,341)
Net cash provided by operating activities	1,771	1,942
Cash Flows From Investing Activities:
Property and equipment additions:
Flight equipment, including advance payments	(1,276)	(1,059)
Ground property and equipment, including technology	(490)	(301)
Purchase of short-term investments	(226)	—
Redemption of short-term investments	1,346	206
Purchase of equity investments	(100)	—
Other, net	(3)	58
Net cash used in investing activities	(749)	(1,096)
Cash Flows From Financing Activities:
Proceeds from short-term obligations	—	1,750
Proceeds from long-term obligations	—	500
Payments on debt and finance lease obligations	(1,443)	(1,285)
Repurchase of common stock	—	(1,325)
Cash dividends	—	(233)
Other, net	(13)	(16)
Net cash used in by financing activities	(1,456)	(609)
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash Equivalents	(434)	237
Cash, cash equivalents and restricted cash equivalents at beginning of period	$                  8,569	$                  2,748
Cash, cash equivalents and restricted cash equivalents at end of period	$                  8,135	$                  2,985
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total of the same such amounts shown above:
Current assets:
Cash and cash equivalents	$                  7,705	$                  1,910
Restricted cash included in prepaid expenses and other	170	57
Other assets:
Restricted cash included in other noncurrent assets	260	1,018
Total cash, cash equivalents and restricted cash equivalents	$                  8,135	$                  2,985

DELTA AIR LINES, INC.
Consolidated Balance Sheets
(Unaudited)
		March 31,		December 31,
(in millions)		2022		2021
ASSETS
Current Assets:
	Cash and cash equivalents	$                        7,705		$                        7,933
	Short-term investments	2,250		3,386
	Accounts receivable, net	3,039		2,404
	Fuel inventory, expendable parts and supplies inventories, net	1,292		1,098
	Prepaid expenses and other	1,434		1,119
	Total current assets	15,720		15,940
Property and Equipment, Net:
	Property and equipment, net	30,042		28,749
Other Assets:
	Operating lease right-of-use assets	7,402		7,237
	Goodwill	9,753		9,753
	Identifiable intangibles, net	5,999		6,001
	Equity investments	1,999		1,712
	Deferred income taxes, net	1,534		1,294
	Other noncurrent assets	1,299		1,773
	Total other assets	27,986		27,770
Total assets		$                      73,748		$                      72,459
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
	Current maturities of debt and finance leases	$                        1,116		$                        1,782
	Current maturities of operating leases	744		703
	Air traffic liability	8,809		6,228
	Accounts payable	4,810		4,240
	Accrued salaries and related benefits	2,288		2,457
	Loyalty program deferred revenue	3,038		2,710
	Fuel card obligation	1,100		1,100
	Other accrued liabilities	2,155		1,746
	Total current liabilities	24,060		20,966
Noncurrent Liabilities:
	Debt and finance leases	24,441		25,138
	Noncurrent air traffic liability	300		130
	Pension, postretirement and related benefits	5,862		6,035
	Loyalty program deferred revenue	4,606		4,849
	Noncurrent operating leases	7,199		7,056
	Other noncurrent liabilities	4,289		4,398
	Total noncurrent liabilities	46,697		47,606
Commitments and Contingencies
Stockholders' Equity:		2,991		3,887
Total liabilities and stockholders' equity		$                      73,748		$                      72,459