Delta Publishes Q4 & Full-Year 2022 Profit

LONDON – One of America’s big four, Delta Air Lines, has announced its financial performance for both the three months and year ending December 31, 2022.

The Financial Results…


Joris Wendt/AviationSource

In what proved to be another difficult year for the air travel industry, Delta came out the other side of it with positive financial performance.

Financial comparisons will be drawn against the performance of 2019, given that this was the last full year of normal uninterrupted operation by the airline. 

Ed Bastian, CEO of Delta said of their performance, “Delta people rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance, and I’m looking forward to recognizing their achievements with over $500 million in profit-sharing payments next month.”

Overall operating revenue came in at $45.6 billion for the year, this being only 2% lower than that for the full year of 2019, drawing a positive comparison given that the industry still isn’t fully back to its pre-pandemic passenger capacities.

Delta President, Glen Hauenstein touched on the positive financial performance in 2022 and outlined plans for further growth in 2023 saying, ”For the year we delivered $45.6 billion in adjusted revenue, a $19 billion increase over the prior year, with record unit revenue performance expected to sustain a revenue premium to the industry of more than 110 percent.”

“Momentum continues in 2023 with strong demand trends, and we expect March quarter adjusted revenue to be 14 to 17 percent higher than 2019 on the capacity that is 1 percent lower.”

Kyle Hayes/AviationSource

When measuring against December 2019, both domestic and international passenger revenues rose. Domestic increased by 7% and international up by 5%.

Corporate sales are 80% recovered back to the levels seen pre-pandemic, and corporate surveys suggest that the company’s travel frequency will either stay the same or increase as we head into the next quarter. 

“As we move into 2023, the industry backdrop for air travel remains favorable and Delta is well positioned to deliver significant earnings and free cash flow growth.”

“We expect to grow 2023 revenue by 15 to 20 percent and improve unit costs year-over-year, supporting a full-year outlook for earnings of $5 to $6 per share and keeping us on track to achieve more than $7 of earnings per share in 2024,” continued Bastian.

One area highlighted as being a particular success was the American Express partnership, exceeding its target remuneration for the year by approximately $500 million. Delta-affiliated card spending was up by 45% compared to December 2019.

Capacities were increased during 2022 and on top of this, the carrier was awarded the Cirium Platinum Award for global operational excellence, and North America’s most on-time airline.

Joris Wendt/AviationSource

Further echoing the sentiments of Ed Bastian, praising staff who rose to the challenges, enabling the airline to perform in an outstanding manner. 

“With a step up in capacity restoration, we reported sequential improvement in December quarter unit cost performance.”

“In 2023, we are confident in completing our network rebuild and delivering the benefits of scale and efficiency as we move through the year, resulting in a 2 to 4 percent decline in non-fuel unit costs year-over-year, including all expected labor cost increases,” said Dan Janki, Delta’s chief financial officer.

Noting the financial burden that the carrier suffered during the covid pandemic, and the fact that the industry still isn’t fully recovered from these impacts, Janki said, ”We made significant progress restoring our financial foundation in 2022 with positive free cash flow generation and three-quarters of double-digit margins.”

“This enabled us to pay down over $4.5 billion of gross debt during the year, strengthening our balance sheet.”

Things to look forward to during 2023 if you are a passenger on Delta include being able to fly on one of their 69 new, fuel-efficient aircraft that they took delivery of during 2022, and experiencing fast and free onboard Wi-Fi on most domestic flights. To gain access to this perk you will need to open a free loyalty account on their website.

Delta continues to invest heavily in improving its environmental impact. The above-mentioned new aircraft helped to improve fleet fuel efficiency by 4.2% when compared to 2019, and they continue further in a bid to decrease emissions by partnering with Aero Design Labs. Who between them will test drag reduction technology that could be implemented in the future? 

Overall…


Karam Sodhi/AviationSource

In what we all hope will be the last year where the pandemic is touted as having an impact on the air travel industry, Delta appears to have navigated it well with 2022 being a relatively relaxed year for Covid-related restrictions.

If they continue on the trajectory that was set during 2022, 2023 could prove to be another record year for Delta, alongside continued growth.

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