Delta Air Lines, Inc. (NYSE:DAL) Affected by Pandemic

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Delta Air Lines, Inc. (NYSE:DAL) stock fell 3.30% (As on Jan 14, 11:.32:03 AM UTC-4, Source: Google Finance) after the company in the fourth quarter of FY 22 has reported the domestic passenger revenue was 78 percent restored compared to December quarter 2019, a 6 point sequential improvement in the rate of recovery versus the September quarter 2021 driven by robust leisure demand, improving corporate travel and strong holiday bookings. International passenger revenue recovered to 50 percent of December quarter 2019 levels, an 8 point improvement sequentially. Domestic and short-haul Latin premium product revenue recovery outpaced main cabin by approximately 10 points, flat sequentially, with Domestic premium revenues 84 percent recovered compared to December quarter 2019. Business travel continues to progress with domestic passenger volumes approaching 60 percent restored during the December quarter 2021. This includes both managed corporate and Small and Medium Enterprises. American Express remuneration of $1.2 billion in the quarter was up 11 percent compared to December quarter 2019 and up 8 points sequentially. Co-brand spend was 121 percent of December quarter 2019, driven by strong holiday retail spend and T&E spend that exceeded December quarter 2019. Co-brand card acquisitions were 86 percent recovered compared to December quarter 2019. Cargo revenue increased to $304 million, a 63 percent improvement compared to the December quarter 2019 and up 24 points sequentially on strong holiday demand and yields.

Moreover, non-fuel cost, adjusted of $6.5 billion was up 3 percent sequentially on a 4 percent decrease in capacity. This was driven primarily by people-related and seasonal costs. Compared to the December quarter of 2019, non-fuel unit costs (CASM-Ex) were 8.3 percent higher, including a 1.2 point impact primarily due to omicron disruptions the last two weeks of the December quarter. At the end of the December quarter 2021, the company had total debt and finance lease obligations of $26.9 billion with adjusted net debt of $20.6 billion and a weighted average interest rate of 4.2 percent.  Operating cash flow during the December quarter 2021 was $555 million. Free cash flow was negative $441 million for the quarter with gross capital expenditures reinvested in the business of $948 million. The company’s Air Traffic Liability was $6.4 billion at December quarter-end, approximately flat compared to the end of the September quarter. At the end of the December quarter, the company had $14.2 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities.

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