LONDON – US carrier Delta Air Lines has reported financial results for the September quarter 2022 and provided its outlook for the December quarter 2022.
In this article, we will focus on some of the airlines highlights with respect to aircraft and fleet initiatives. We also look at Delta’s reported gains and strengths in the operational and cultural sides of their business.
Let’s begin with an overview of the financials:
September quarter financials
Delta have turned in a strong quarter, with a forecast of further financial gains in the coming final quarter of the year. Ed Bastian, Delta’s chief executive officer, echoed this in his statement, saying:
“Thanks to the incredible work of our entire team, Delta delivered a strong September quarter with record quarterly revenues and a double-digit operating margin.”
“In this environment, we expect December quarter revenue growth to accelerate versus 2019 with an operating margin of approximately 10 percent.”
“We’re working towards full network restoration by summer of 2023, which supports a meaningful step up in profitability and cash flow next year on our path to earn over $7 of EPS and $4 billion of free cash flow in 2024,” Bastian said.
September Quarter 2022 Adjusted Financial Results
- Operating revenue of $12.8 billion, 3 percent higher than September quarter 2019, including a $35 million impact from Hurricane Ian
- Operating income of $1.5 billion with an operating margin of 11.6 percent
- Earnings per share of $1.51, including a 3¢ impact from Hurricane Ian
- $11.2 billion in liquidity* and adjusted net debt of $20.5 billion at quarter end
Delta Air Lines Fleet & Partner Updates
100 new Boeing 737-10s
On July 18, Delta announced it had reached an agreement with The Boeing Company to purchase 100 Boeing 737-10 aircraft, with options for 30 more. Deliveries of the aircraft will begin in 2025. In addition to improved fuel efficiency, these aircraft will have higher gauge and more premium seating.
Delta’s 737 fleet will grow to over 300 aircraft by 2030, making it one of the company’s largest fleet families. The company also announced a service agreement with CFM International to service the more sustainable next-generation LEAP engines.
Delta TechOps will be one of a select few maintenance, repair and overhaul providers worldwide for the LEAP-1B engine.
Delta & LATAM agreement
On September 30, the U.S. Department of Transportation approved and granted antitrust immunity to the trans-American Joint Venture Agreement between Delta and LATAM.
The carriers’ deepened cooperation under the Joint Venture Agreement will improve travel options and services for customers traveling between the U.S./Canada and South America.
Both airlines will work closely to deliver the customer benefits that this approval unlocks, including expanded capacity, increased routing options, superior frequent flyer benefits and shared airport facilities and amenities.
eVTOL partnership with Joby Aviation
On October 11, Delta announced a strategic partnership with Joby Aviation, Inc., an all-electric vertical take-off and landing (eVTOL) innovator. Delta and Joby share a commitment to delivering a seamless, zero-operating-emission, premium customer experience for eVTOL service.
The partnership will leverage Delta’s commercial and operational expertise to develop Joby’s transformational home-to-airport transportation service for Delta customers.
Operational highlights
The airline has also demonstrated strong gains in terms of its operational reliability as the global aviation sector grapples with post-pandemic issues. They also cite some key staff and culture highlights.
Operational reliability
- Significant improvement in operational reliability in the September quarter, driven by schedule adjustments, continued hiring and staffing, better crew availability and process improvements
- September performance prior to Hurricane Ian was the best month of 2022, and we achieved a 99.9 percent Mainline domestic completion factor through September 26, which was no. 1 in our competitive set. On-Time Arrival rate was no. 1 for the full month of September*
Culture & people
- Recorded $291 million of profit-sharing accrual year-to-date, expected to be paid out to Delta employees in February 2023
- Contributed over $500K to the American Red Cross toward Hurricane relief efforts
- Recognized as one of Forbes’ Best Workplaces for Women in the U.S. for a second year in a row, with employees giving Delta top marks on the airline’s benefits and representation of women in leadership
- Scored 100 percent on the Disability Equality Index for the seventh year in a row ranking it as one of the nation’s “Best Places to Work for Disability Inclusion”
Summary
Taken together, it appears Delta Air Lines can be pleased with their September quarter results – not only from a financial point of view, but also from the broader perspective of operational performance and cultural development.
Their final quarter for the year will be viewed with interest, as they appear set to close 2022 out on a strong note.
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