Delta’s shares soar as travel surges despite rising fuel prices
Delta’s shares got a boost after the airline said customers were taking to the skies in record numbers — despite fresh COVID-19 cases and stiff fuel prices that have pushed up ticket prices.
“We are seeing historic levels of sales activity and booking volumes at levels higher than any time in our history,” Delta CEO Ed Bastian told The Wall Street Journal.
Business took a turn for the better in March, Bastian said, as the company returned to profitability, helped by the first spike in business and international travelers in months and a “strong spring break season.”
Delta forecasts it will turn a profit in the second quarter after reporting a loss of $940 million for the quarter ended March 31.
Shares of the company rose more than 4% on the rosy outlook.
Soaring fuel costs will be offset by higher ticket prices for now, the company said, and there is little headwind from consumers.
“With a strong recovery in demand as Omicron slowed, we returned to profitability in March and delivered a solid adjusted operating margin of almost 10 percent,” Bastian said in a statement. “As our brand preference and demand dynamics increase, we are successfully recapturing higher fuel prices.”
Delta estimates that 84% of capacity will return in the second quarter compared to the same period in 2019, and expects the revenue recovery to be 93% to 97% of pre-pandemic levels.
Domestic corporate sales rose to 70% of pre-pandemic levels in March, up from 50% in the first two months of the year, the company said, while international sales in March hit 50% of 2019 levels, up from 35% in January and February.
The tourism recovery emboldened JetBlue to announce the creation of 5,000 jobs in New York City in late March.
https://nypost.com/2022/04/13/deltas-stock-spikes-as-travel-surges-despite-rising-fuel-prices/ Delta’s shares soar as travel surges despite rising fuel prices