Dustin’ off the passport… and savin’ the free peanuts. Delta flew home a $735M profit last quarter, the biggest since the pandemic began. Packed planes, ludicrous fares, and Delta's oil refinery drove sales up 10% from 2019 — surpassing pre-pandemic levels for the first time. But investors weren’t impressed: Delta shares fell 5% yesterday, and United and American dropped ahead of their reports next week. Still, things are looking up:
- Corporate comeback: Delta's lucrative US business travel recovered to 80% of pre-pandemic levels, and it expects an even bigger corporate rebound this fall.
- Vacation vengeance: More than half of Americans planned to book a summer vacay, even with ticket prices up 35% from last year.
3-hour flight… 8-hour layover. It's been a tumultuous summer for fliers as they battle hours-long TSA lines and endless delays and cancellations. Airlines took on packed flight schedules to make up for years of slowing revenue. But instead, fuel costs and labor have led to more canceled flights so far this year than all of 2021. Now Delta’s slowing flight growth to avoid more disruptions.
- Flight fatigue: Delta pilots have been on strike after working more overtime than in 2018 and 2019 combined. Now Delta’s spending an extra $700M to stay staffed up.
Travel-pocalypse hasn’t hit the bottom line… it may’ve even helped. You’d think all the delay and cancellation headaches would hurt airlines, but they’re just driving up seat prices. Case in point: American (the world’s largest airline) predicted a 12% jump in June revenue from three years ago. Airlines could return to full profitability next year.