Delta Air Lines reports its financial results for the second quarter:
Delta Air Lines today reported financial results for the June quarter 2021 and provided its outlook for the September quarter 2021. Highlights of the June quarter 2021 results, including both GAAP and adjusted metrics, are on page six and are incorporated here.
- June quarter 2021 GAAP pre-tax income of $776 million and earnings per share of $1.02 on total revenue of $7.1 billion
- June quarter 2021 adjusted pre-tax loss of $881 million and adjusted loss per share of $1.07 on adjusted operating revenue of $6.3 billion
- With an improving demand environment, achieved a solid pre-tax profit in the month of June and recently announced the opportunistic addition of seven A350s and 29 737-900ERs to our fleet
“With the best employees and operation in the industry and an accelerating demand environment, we achieved significant milestones in the quarter including a solid pre-tax profit in the month of June, positive free cash flow for the June quarter, and our people and our brand being recognized with the top spot in the J.D. Power 2021 Airline Study,” said Ed Bastian, Delta’s chief executive officer. “Looking forward, we are harnessing the power of our differentiated brand and resilient competitive advantages to drive towards sustainable profitability in the second half of 2021 and enable long-term value creation.”
“Domestic leisure travel is fully recovered to 2019 levels and there are encouraging signs of improvement in business and international travel. With the recovery picking up steam, we are making investments to support our industry-leading operation. We are also opportunistically acquiring aircraft and creating upside flexibility to accelerate our capacity restoration in 2022 and beyond in a capital-disciplined manner,” he said.
June Quarter Financial Results
- Adjusted pre-tax loss of $881 million excludes $1.5 billion of benefit related to the first and second payroll support program extensions (PSP2 and PSP3, respectively) and mark-to-market adjustments on our investments
- Adjusted operating revenue of $6.3 billion, which excludes refinery sales, declined 49 percent on 39 percent lower sellable capacity (see Note A) versus June quarter 2019
- Total operating expense, which includes $1.5 billion of benefit related to PSP2 and PSP3, decreased $4.1 billion relative to the June quarter 2019. Adjusted for the benefit related to the PSP programs and third-party refinery sales, total operating expense decreased $3.3 billion or 32 percent in the June quarter 2021 versus the comparable 2019 period
- Generated $1.9 billion of operating cash flow, $1.5 billion of free cash flow and $195 million of free cash flow, adjusted in the June quarter
- At the end of the June quarter, the company had $17.8 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities. The company had total debt and finance lease obligations of $29.1 billion with adjusted net debt of $18.3 billion
The company recently announced it will add seven A350s and 29 737-900ER pre-owned aircraft to its fleet. This follows the announcement in April to exercise 25 A321neo options. The A350s and 737-900ERs will enter service over the next 24 months, starting in summer 2022. These fleet decisions align with the fleet renewal strategy and will drive improved unit costs going forward by replacing older, less efficient aircraft. The company will lease the seven A350s and acquire the 29 737-900ERs, driving incremental capex of approximately $700 million in the second half of this year. The company now anticipates full year 2021 total gross capex of approximately $3.2 billion