Shares of Delta Air Lines Inc (NYSE: DAL) are down roughly 5.0% on Wednesday even after the air carrier said its revenue will recover back to 2019 levels in the current quarter.
Delta is seeing phenomenal travel demand
The airline also expects better margin this quarter as strong demand helps offset higher fuel costs. Discussing revised guidance on CNBC’s “Halftime Report”, CEO Ed Bastian said:
Demand is phenomenally strong. We expect our revenue to be fully restored to 2019 level despite the fact that we’ll only have about 82% of our available seats for sale. So, that level of demand continues to grow as we look into Q3 and beyond.
In April, Delta Air Lines reported better-than-expected results for its fiscal first quarter. At the time, it had seen Q2 revenue down roughly 7.0% versus the 2019 equivalent. The stock is roughly flat for the year at present.
Delta prioritises the reliability of its services
Delta had to cancel more than 700 flights over the recent “Memorial Day” weekend on weather and staffing issues, but CEO Bastian asserts the same won’t happen again during the summer.
That’s not acceptable. We’ll keep essentially our current level of operations intact throughout the summer. We won’t grow at all because the reliability of our service is more important than chasing that last dollar of revenue.
Since the start of 2021, the air carrier has hired 15,000 to overcome staffing shortages amidst rising demand. The chief executive forecasts another 25% to 30% increase in fares this summer.
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