Delta Air Lines posts quarterly loss but forecasts profit as peak travel season approaches

Delta Air Lines posted a wider loss than it previously estimated for the first three months of the year, but forecast revenue growth and profit for the second quarter that were ahead of analysts’ estimates, signaling strong travel demand despite weakness in other sectors. CEO Ed Bastian on Thursday brushed off the potential of a consumer pullback in spending. Air travel “is something the consumer’s prioritizing,” Bastian said in an interview. “They may be pulling back in other areas ... but I don’t see it in our credit card data, I don’t see it in our bookings.” The Atlanta-based carrier said it expects sales in the current quarter to increase by 15% to 17% over last year, with adjusted operating margins of as much as 16% and adjusted earnings per share of between $2 to $2.25. Analysts polled by Refinitiv had anticipated second-quarter revenue growth of 14.7% and earnings per share of $1.66. The airline projected “record advance bookings for the summer.” Bastian said the carrier is dialing back its capacity growth plans for the summer, however, in an effort to improve reliability. Airlines have faced aircraft delivery delays, staffing and training backlogs, and constrained airspace. Delta said it plans to grow capacity 17% in the second quarter from a year earlier, though that won’t get the carrier back to 2019 levels as it previously planned. “We’re intentionally pulling back some of the capacity,” Bastian told CNBC. “We want to make sure we don’t outrun our capabilities.” He said the airline should be able to get to 2019 capacity levels by the end of the year. U.S. carriers generally make the bulk of their revenue during the busy spring and summer travel season and Delta’s outlook points to more strength in travel demand, and its strong pricing power. Delta is the first US carrier report quarterly earnings this season. <br/>