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Planes have been packed to pre-pandemic levels this summer, and that is letting airlines take in enough money to cover higher fuel costs – and then some. Delta said Wednesday that it earned $735m in Q2. Earnings per share fell short of Wall Street expectations, however, which the airline blamed on high fuel prices and more than 4,000 canceled flights in May and June. “We had a rough six weeks,” CEO Ed Bastian said. “This is a company, this is an industry ... none of us were up to our best.” Shortly before July 4, airlines leaders were scolded during a virtual meeting with Transportation Secretary Pete Buttigieg, who implored the carriers to do better over the holiday weekend. They did — although airlines and federal officials have since traded blame for massive delays and cancellations so far this summer. The Atlanta carrier had the most canceled flights over the Memorial Day and Juneteenth weekends. Bastian said Delta and other airlines tried too hard to make up for two years of pandemic and grab the most revenue they could while demand was hot. “We probably pushed ourselves too far,” he said in an interview. Bastian said Delta recalibrated by eliminating planned growth this year, continuing to hire pilots and other workers, and relaxing the schedule by giving passengers more time to board. The airline canceled 337 flights or about 1% of its schedule in the first 11 days of July, and just 83 after July 3, a major improvement over earlier in the summer, according to figures from tracking service Flightaware. While vacation travel is booming, analysts have urged caution about the period after Labor Day. Business travel, which becomes crucial to airlines once families go home and kids return to school, has not recovered as quickly as personal travel. Employers are still hiring, but recession is being talked about more. Consumers are worried about inflation. Delta is betting that consumers still want to travel and they have money, partly because they’re no longer buying as much stuff for their homes.<br/>

Delta Wednesday forecast a “meaningful” profit for the full-year as robust travel demand helped it post its strongest quarterly earnings since the start of the pandemic. The Atlanta-based carrier expects a solid profit in the third quarter as well, with operating margin estimated to be in the range of 11%-13%. The No 3. US airline by fleet size said there is no evidence of a pullback in consumer demand. It reported an adjusted profit of $1.44 per share for Q2. That was below analysts’ expectations of $1.73 per share, according to Refinitiv, yet still marked the carrier’s best performance since 2019. Revenue for the quarter through June came in at $13.8b, topping Wall Street estimates. “This is an industry that hasn’t seen demand in a material way for two years, and so we have a lot of consumers with a tremendous urge and desire to travel,” CE Ed Bastian said. American carriers are enjoying the strongest summer travel season in three years as more people resume regular activities including vacations, and the lifting of pandemic travel restrictions has sent bookings soaring. International traffic is on a rebound, while office reopenings are fueling corporate travel demand. US passenger traffic is up 18% this summer from a year ago and has been averaging about 89% of the pre-pandemic levels since the Memorial Day holiday weekend in May, according to Transportation Security Administration data, making for a profitable second-quarter for most of the major carriers despite inflationary pressure. Rival American Airlines on Tuesday forecast its first quarterly profit since the onset of the pandemic.<br/>

Delta CE Ed Bastian said the carrier had not seen any signs of waning demand for travel despite soaring inflation and that he was relaxed about the impact of a possible recession. “I am not worried about it,” Bastian said in an interview when asked about recession risks. “Should demand drop, we would take measures to adjust supply or capacity to accommodate . . . but I’m not anticipating that.” The airline “is already pretty disciplined and conservative going into a potential recessionary climate”, he added, noting that seating capacity was still at 82% of 2019 levels. An economic slowdown would also reduce the cost of jet fuel, providing a tailwind for airlines contending with prices that have roughly doubled since 2019. Bastian said the Atlanta-based carrier, the third largest in the US, had seen “very healthy” demand from customers for flights throughout the rest of the summer and in the early autumn, as well as promising signals for the holiday season. US flight schedules were thrown into chaos during May and June after thousands of delays and cancellations caused by staffing issues, bad weather and air traffic control problems. “It was our rough patch . . . a function of an enormous surge in demand” that Delta struggled to meet, Bastian said. The airline — which was the hardest hit over the busy Memorial day weekend — “didn’t do as good as we could”, he added. Bastian said avoiding a repeat of the havoc was the airline’s “number-one challenge”. Despite the tumult, the surge in demand resulted in a profitable second quarter for Delta, which generated adjusted net income of $921m on operating revenue of $12b. However, profit and revenue were down 40% and 1% respectively versus the same period in 2019.<br/>

Airbus is in talks with Delta to expand the US carrier's existing order for A220 small jetliners, two people familiar with the matter said. The deal for a top-up order of around a dozen aircraft could be signed at next week's Farnborough Airshow where the U.S. carrier is also widely expected to finalize an order for at least 100 Boeing 737 MAX airliners. Airbus declined to comment on discussions with customers. Delta also declined to comment. The airline has ordered 95 Canadian-designed A220s of which it has taken delivery of 56, according to end-June Airbus data. Reuters first reported in March that Boeing was in talks with Delta for some 100 of its 737 MAX 10 jets. read more . Delta CEO Ed Bastian said in June the airline was trying to reach a deal with Boeing.<br/>Bastian told investors on an earnings call on Wednesday that the airline could make some additional orders but did not confirm a deal with Airbus or Boeing. He added that Delta is in a good place with orders but sees opportunities in the next 3-5 years for large narrow-body acquisitions. "That's something that we're always talking to Airbus and Boeing about and whether that's used or whether that's new, there's opportunity there," Bastian said. "We've got a pretty healthy stream of wide-bodies coming. So I'd say the focus in the back end of the five-year period is on the large narrow bodies."<br/>

A Delta plane packed with luggage but no passengers was flown from Heathrow Airport in London to Detroit this week, a Delta spokesman said on Wednesday. The luggage belonged to Delta customers who had recently traveled through Heathrow and were separated from their bags because of travel disruptions. Delta decided to send the plane, an Airbus A330-200, to deliver 1,000 pieces of stranded luggage to Detroit on Monday, and from there the airline transported them to their owners across the United States “to accelerate movement of delayed bags,” said Morgan Durrant, the Delta spokesman, who described the move as a “creative solution.” It has been a chaotic summer for travel. Staffing shortages, the pandemic and high demand from travelers have led to scores of canceled and delayed flights. Some of the worst problems happened over the July Fourth weekend, with more than 1,400 cancellations of flights into, within or from the United States from that Friday through Sunday, according to FlightAware. Things have been particularly chaotic at Heathrow Airport. A baggage system malfunction there last month contributed to even more flight cancellations. And on Tuesday, the airport announced that because of constrained capacity, it would curb the number of departing passengers until mid-September, calling on airlines to limit ticket sales. Despite the widespread inconveniences and rising prices because of inflation, consumer demand for travel remains robust, for now. Delta Air Lines on Wednesday reported a quarterly profit of $735m, and said it expected strong demand to continue into the fall.<br/>