Delta lost $408 million; 8,000 employees vulnerable to infection

CEO Ed Bastian said 8,000 employees have contracted COVID-19 in the past four weeks. More than 2,200 flights have been canceled since December 24 due to sick workers and winter storms.

Cancellations have fallen sharply over the past few days, but faster flights have cost the airline $75 million and the latest outbreak caused by the Omicron version of the virus is expected to push back the industry’s recovery by two months.

“I don’t think we’re going to see an uptick in bookings or travel during January and probably the first half of February,” Bastian said in an interview. “It’s always the weakest part of the year, and it’s going to be very vulnerable because of Omicron. We need confidence in getting back to travel once the virus subsides.”

Delta expects omicron infections to peak over the next few days and then decrease rapidly as in South Africa and – more slowly – in the United Kingdom.

O’Micron has taken a long, slow increase in travel and has turned it upside down. So far in January, the number of people flying into the US is down 20% from the same month in 2019 – worse than the 16% drop in November and December.

Earlier this week, United Airlines CEO Scott Kirby sent a letter to employees saying that 3,000 employees had tested positive for COVID-19. In Newark in a single day, nearly a third of United’s employees reported ill and the airline cut scheduled flights across the system.

Both airlines have about 74,000 employees.

Delta expects to lose money entirely in January and February, and in the first quarter. Revenue in the quarter is expected to be 72% to 74% of pre-pandemic levels, Delta said, similar to the fourth quarter. Costs other than fuel will increase by about 15% from 2019, and jet fuel is also getting costlier.

However, the Atlanta company expects to return to profitability in March — when spring break could help fill planes, especially if coronavirus infections are falling.

Bastian said several thousand people are likely to be hired this year as Delta comes back from the pandemic. The company set aside $108 million for a special profit-sharing payout of $1,250 for each current employee.

Thanksgiving pay to employees comes as a new clash between largely non-union Delta and the nation’s largest flight attendants union. The union accused Delta of pressuring employees to return to work too soon after contracting the virus.

Delta last month lobbied the US Centers for Disease Control and Prevention to reduce the recommended quarantine period for people contracting the virus from 10 days to 5 days, Bastian and other Delta officials said to the 10-day standard. can significantly impact our workforce. and operating.”

The CDC made the change, with its director Rochelle Valensky explaining on NPR that “we … began to see challenges with airline flights and other sectors.”

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

Excluding losses on certain investments and profit-sharing, Delta earned $170 million, or 22 cents per share. It easily tops estimates of 14 cents per share on Wall Street, according to a FactSet survey.

Revenue was $9.47 billion, down 17% from $11.44 billion in the fourth quarter of 2019, but higher than the $9.02 billion estimated by industry analysts.

Shares of Delta Air Lines Inc rose about 2% on Thursday before the opening bell and most major airlines were trading higher.