Delta Air Lines reported a $1.3 billion profit for 2022, reaping the benefits of a strong rebound in travel and high air fares paid by consumers clamoring to return to the skies.
The Atlanta-based carrier reported a profit despite high fuel costs exacerbated by Russia’s invasion of Ukraine and stronger global demand. Delta also grappled with a summer of flight disruptions and a hiring blitz to replace staff it cut when the COVID-19 pandemic slammed air travel and pummeled the economy.
The company brought in nearly $50.6 billion in revenue last year, up from less than $29.9 billion in 2021 and better than its record pre-pandemic 2019 revenue of $47 billion.
As a result of the profits, the Atlanta-based airline will pay out $563 million in profit sharing bonuses to its employees next month.
“Delta people rose to the challenges of 2022,” said Delta CEO Ed Bastian in written comments.
This year, Delta expects to continue its recovery from the impact of the pandemic, forecasting 15-20% growth in revenue as it works to fully restore its flight schedule by this summer.
Delta’s operating expense grew to $46.9 billion in 2022, up from $28 billion in 2021. Fuel expense doubled to nearly $11.5 billion in 2022.
This year, the airline expects to see labor costs rise — including expectations for a new pilot union contract to include an initial 18% pay increase. That’s part of the terms agreed to by union and management negotiators last month. A tentative agreement is being finalized to be put up for a vote by union officials, then rank-and-file pilots.
Severe winter weather during the December holidays drove thousands of flight cancellations on Delta, which drove 1 percentage point of increase in unit costs.
But that was not as severe an impact as experienced by Southwest Airlines, which had a meltdown of its operations over the Christmas travel period with a whopping 16,700 flight cancellations. All in all, that will end up costing Southwest $725 million to $825 million.
Delta, however, earned most of its profits for the year in the fourth quarter. In the fourth quarter, Delta had $828 million in profit, a significant improvement from its $408 million loss a year earlier. The company’s quarterly operating revenue was $13.4 billion, up from $9.5 billion in the year-ago quarter.
In that quarter that ran from October to December, Delta’s domestic passenger revenue was 7% above 2019 levels, and international passenger revenue was up 5%. Domestic corporate sales reached 80% of 2019 levels.
It’s yet to be seen how economic turmoil could affect demand for air travel later this year.
Delta President Glen Hauenstein signaled optimism, saying in written comments that momentum “continues in 2023 with strong demand trends.”
