Delta Air Lines has posted profits of $652 million for the second quarter of 2021. The airline announced its quarterly results today, revealing promising signs of recovery. Operating revenues were up by 76% compared to Q1 2021, although figures are still a far cry from the airline's financial results from June 2019.
Net income of $652 million for Q2 2021
Delta's financial results from Q2 2021 show that the airline made a profit of $652 million. While this may be less than half of the profit made for the same period in 2019 ($1.44 billion), it still represents positive signs of a resurgence.
The airline's total operating revenues reached $7.12 billion for the quarter, down from $12.53 billion in Q2 2019. Operating expenses were also down to $6.31 billion from $10.4 billion for the same period.
Ed Bastian, CEO of Delta, said,
“With the best employees and operation in the industry and an accelerating demand environment, we achieved significant milestones in the quarter including a solid pre-tax profit in the month of June, positive free cash flow for the June quarter, and our people and our brand being recognized with the top spot in the J.D. Power 2021 Airline Study."
Key takeaways from the report include:
- Passenger operating revenue - $5.34 billion
- Cargo operating revenue - $251 million
- Salary and related expenses - $2.33 billion
- Aircraft fuel and related taxes - $1.49 billion
- Aircraft maintenance materials and outside repairs - $287 million
- Operating cash flow - $1.9 billion
- Total debt and finance lease obligations - $29.1 billion
- Adjusted net debt - $18.9 billion
Importantly, Delta has included the $1.5 billion received in government aid within its results. The aid was received as part of the U.S government's payroll support program. Delta included $1.1 billion from PSP2 and $356 million from PSP3 in its results and will include the rest of its PSP3 grant in its next quarterly results.
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Domestic travel leads to recovery
Delta owes a considerable part of its financial recovery to the resurgence of domestic travel in the US. According to its quarterly report, Delta made $4.47 billion in revenue from domestic travel, amounting to 84% of the airline's total passenger revenue. Business and international travel are still faltering, although the airline believes it will pick up in due time.
Bastian noted,
“Domestic leisure travel is fully recovered to 2019 levels and there are encouraging signs of improvement in business and international travel."
In its other markets, the airline made $485 million in Latin America, $288 million in the Atlantic and $88 million in the Pacific. Cargo revenues were also healthy, with Delta bringing in $251 million, an increase from the $186 million made in Q2 2019.
Bastian has also noted that Delta is using the promising signs of recovery to make investments and bolster its fleet. Bastian said,
"With the recovery picking up steam, we are making investments to support our industry-leading operation. We are also opportunistically acquiring aircraft and creating upside flexibility to accelerate our capacity restoration in 2022 and beyond in a capital-disciplined manner.”
What do you think about Delta's financial results for Q2 2021? Please share your thoughts and insights in the comments.