Delta Air Lines begins 2023 with $363 million net loss

Despite recording a quarterly net loss of $363 million, the chief executive officer of Delta Air Lines remains optimistic, stating that the airline “is off to a strong start”.

The airline, which is based at Hartsfield-Jackson Atlanta International Airport (ATL), ended Q1 2023 with $12.8 billion of revenue and a net loss of $363 million. Delta Air Lines noted that the results are “in-line with guidance” and said it expected record-breaking revenues in Q2 2023 as well as a return to profitability with a “mid-teens operating margin”.

“Thanks to the outstanding work and dedication of the Delta team, 2023 is off to a strong start. We provided well-deserved pay increases for our people and paid more profit sharing than the rest of the industry combined,” commented Ed Bastian, CEO of Delta Air Lines.

Bastian also said that the carrier is gathering momentum following the “nearly $5 billion profit” recorded in 2022, and that he expects the airline to “deliver record revenue, and an adjusted operating margin of 14 to 16 percent with earnings per share of $2.00 to $2.25” in Q2 2023.

As a result, the Q1 2023 loss should be offset by an expected record revenue in Q2 2023, which is why Delta Air Lines is also confident in its “full-year guidance for revenue growth of 15 to 20 percent year over year, earnings of $5 to $6 per share and free cash flow of over $2 billion,” Bastian concluded.

Compared to Q1 2022 company revenues rose by $3.4 million, going from $9.3 billion to $12.7 billion in Q1 2023. However, operating expenses rose by $2.9 billion, with Delta Air Lines spending $13.03 billion to run its operations throughout the three-month period. In addition, non-operating expenses of $229 million resulted in Delta Air Lines ending Q1 2023 with a net loss of $363 million, even with an income tax benefit of $143 million.

Still, the airline maintained a positive free cash flow of $1.8 billion, which was a record for the company, allowing it to accelerate its debt-reduction activities.

Looking forward, Delta Air Lines expects to have an operating margin of between 10% and 12% and earnings per share (EPS) of between $5 and $6 in 2023.