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Delta Air Lines reports a loss of $ 408 million for the last quarter of 2021, driven by a wave of COVID-19 that rocked the airline in December, and the carrier expects to take an additional quarterly loss before travel resumes in spring and summer

Delta Air Lines lost $ 408 million in the last quarter of 2021, driven by a wave of COVID-19 that rocked the airline in December, and the carrier on Thursday predicted it would suffer an additional quarterly loss before the benefits travel only increase in spring and summer.

CEO Ed Bastian said 8,000 employees contracted COVID-19 in the past four weeks. Sick workers and winter storms have resulted in more than 2,200 canceled flights since December 24.

Cancellations have fallen sharply in recent days, but the surge in peak flights has cost the airline $ 75 million and the latest outbreak, caused by the omicron variant of the virus, is expected to push back the industry’s recovery. two months.

“I don’t think we’ll see a resumption of bookings or travel in January and probably in the first part of February,” Bastian said in an interview. “It’s always the weakest part of the year, and it’s going to be even weaker because of omicron. We need confidence in the return of travel once the virus has receded. “

Delta expects omicron infections to peak over the next few days, then decline rapidly as in South Africa and – more slowly – in the UK.

Omicron interrupted a long, slow increase in stroke and reversed it. So far in January, the number of people traveling to the United States is down 20% from the same month in 2019, worse than the 16% drops in November and December.

Earlier this week, United Airlines CEO Scott Kirby sent a letter to employees saying 3,000 employees had tested positive for COVID-19. In just one day in Newark, nearly a third of United’s staff called the sick and the airline slashed scheduled flights system-wide.

Delta expects to lose money in January and February and for the entire first quarter.

The airline expects first quarter revenue to be 72% to 74% of pre-pandemic levels, roughly the same as in the fourth quarter. Costs are expected to increase sharply. Costs other than fuel will increase by around 15% from 2019, and jet fuel also becomes more expensive.

However, the Atlanta-based company expects to return to profitability in March – when spring break could help fill planes, especially if coronavirus infections are down – and for the rest of 2022.

Delta believes it will hire several thousand people this year, Bastian said, as she recovers from the pandemic and prepares for what she hopes will be a busy summer. The company has set aside $ 108 million for special profit sharing payments of $ 1,250 for each current employee.

The employee thank you payment comes as a new skirmish erupts between the largely non-union Delta and the nation’s largest flight attendant union. The union accuses Delta of pressuring employees to return to work too soon after contracting the virus.

Delta lobbied the United States Centers for Disease Control and Prevention last month to reduce the recommended quarantine period from 10 days to 5 days for vaccinated people who contract the virus, Bastian and other Delta officials claiming that the 10-day standard can have a significant impact on our workforce. and operations.

The CDC made the switch, with its director, Rochelle Walensky, explaining on NPR that “we started to see challenges with … airline flights and other areas.”

Sara Nelson, president of the Association of Flight Attendants, said Delta lobbied the CDC after it delayed offering incentive pay to employees to take extra work during the holidays as infections spread.

Delta disputes the union’s claims, and the airline’s senior lawyer sent a cease and desist letter to the union last week, accusing the group of making “false and defamatory” statements about the company .

Delta’s loss in the fourth quarter compared to a profit of $ 1.1 billion in the same quarter before the pandemic.

Excluding losses on certain investments and profit sharing, Delta earned $ 170 million, or 22 cents per share. That easily topped Wall Street’s per share projections of 14 cents, according to a FactSet poll.

Revenue rose to $ 9.47 billion, down 17% from $ 11.44 billion in the fourth quarter of 2019, but well above the projected $ 9.02 billion by industry analysts.

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David Koenig can be contacted at www.twitter.com/airlinewriter



ABC News

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