Delta Air Lines records US$500m profit, targets 20% revenue growth in 2023

Delta Air Lines
Employees and dignitaries gather outside the Delta Flight Museum to celebrate the opening of the Delta Air Lines 747 Museum in Atlanta, Georgia on Tuesday March 28 , 2017. ©2017 Chris Rank/ Rank Studios

A leader in domestic and international travel, Delta Air Lines, has expressed optimism for this year as it recorded over US$ 500 million in profit for the year 2022.

Acknowledging difficulties experienced by the aviation sector last year, Delta attributes its 2022 strides to “delivering industry-leading operational reliability and financial performance”.

“As we move into 2023, the industry backdrop for air travel remains favourable, and Delta is well-positioned to deliver significant earnings and free cash flow growth,” Delta’s Chief Executive Officer Ed Bastian has said in a statement announcing Delta’s ‘December Quarter and Full Year 2022 Profit’.

He added that his outfit is expected to “grow 2023 revenue by 15 to 20 percent and improve unit costs year-over-year, supporting a full-year outlook for earnings of US$5 to US$6 per share and keeping us on track to achieve more than US$7 of earnings per share in 2024”.

Revenue environment and outlook

The president of Delta Airlines, Glen Hauenstein, indicated that the company delivered US$45.6billion in adjusted revenue – a US$19billion increase over the prior year, with record unit revenue performance expected to sustain a revenue premium to the industry of more than 110 percent.

He maintains that: “The industry-leading operations and best-in-class service our people provided drove strong customer satisfaction scores and increasing brand preference in 2022. Momentum continues in 2023 with strong demand trends, and we expect the March quarter adjusted revenue to be 14 to 17 percent higher than 2019 on capacity that is 1 percent lower,” he said.

“In 2023, we are confident in completing our network rebuild and delivering the benefits of scale and efficiency as we move through the year, resulting in a 2 to 4 percent decline in non-fuel unit costs year-over-year – including all expected labour-cost increases,” added Chief Financial Officer, Dan Janki.

Cost performance

“For the March quarter, we expect non-fuel unit costs to increase 3 to 4 percent year-over-year, including a full quarter impact from labour cost increases and finalising the rebuild of our network for the peak summer period.  Our outlooks for the March quarter and full-year are consistent with our cost framework provided to investors on December 14, updated for all expected labour cost increases,” Mr. Janki said.

He said Delta made significant progress restoring its financial foundation in 2022, with positive free cash flow generation and three-quarters of double-digit margins.

This enabled them to pay down over US$4.5billion of gross debt during the year, strengthening its balance sheet. “We expect to deliver free cash flow of more than US$2billion in 2023, and further reduce debt on our path to reach investment grade metrics in 2024,” he said.

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