Shares of Delta Air Lines, Inc. stepped higher on Wednesday as the surging travel demand helped offset the mounting fuel costs.
In the regular trading session, the US carrier soared 6.21% or 2.40 points to $41.02 per share. Eventually, it slightly rose 0.07% or 0.03 points to $41.05 per share in the after-hours market.
This significant upturn added $1.53 billion to the company’s valuation. It extended the positive trend of 1.07% to $38.62 per share on Tuesday. Since the start of the year, the stock has traded 1.81% or 0.73 points higher.
Accordingly, Delta anticipates returning to a profit this quarter due to the red-hot bookings. It forecasts unit revenues to significantly increase during the second quarter compared with 2019.
The firm also projects overall sales to recover 97.00% from its level three years ago before the pandemic.
In March, Delta Air Lines logged the highest bookings in its history. Correspondingly, the company expects consumers to prioritize travel despite the sky-tall inflation.
The American consumer prices increased by a record rate of 8.50% last month. It reflected the soaring costs in supermarkets, gas stations, and the housing sector.
Moreover, the Atlanta-based airline will step up its schedule as peak travel season approaches. This quarter, the firm targets to fly 84.00% of its 2019 capacity levels.
Its plans skidded the higher fuel prices and other costs associated with ramping back up. Subsequently, domestic US airfare rose 20.00% last month compared with 2019. This upswing shows that people could pay more to travel after two years of the COVID-19 health crisis.
Delta ensures that it has enough staff for the summer. Previously, employee shortages have hamstrung airlines’ growth and worsened flight disruptions over the past year.
Delta Air Lines posts positive Q1 revenue
In the first three months of the year, Delta Air Lines posted revenue of $9.35 billion. The figure notably surpassed the market consensus of $8.92 billion.
Meanwhile, its sales were still off 11.00% from the last three years. Carriers compared results against 2019 to show their recovery against their pre-pandemic performance.
Then, its adjusted loss per share declined to $1.23, slightly better than the estimated $1.27. However, the first-quarter fuel bill jumped 6.00% from 2019 to $2.09 billion.
The higher cost came even though its capacity was down 17.00%. Jet fuel prices have doubled from last year and are up more than 50.00% since the start of the year.
Furthermore, Delta mentioned that other areas of its business also improved. First-quarter revenue from its refinery was $1.20 billion, higher than the $48.00 million three years earlier.
