Delta Air Lines on Thursday forecast higher-than-expected profit for the current quarter, citing 'record' bookings for summer travel, even as the carrier missed first-quarter profit estimates due to higher fuel and labor costs.
U.S. carriers have tried to leverage travel demand with higher ticket prices to offset rising labor and fuel bills. But investors fear that any pullback in travel spending would hurt airline profits.
"The second quarter setup looks solid, and features key international corridors leading unit revenue growth, and continued solid results from the carrier's co-branded card," said Citi analyst Stephen Trent. Bastian downplayed these concerns. He said Delta recorded the 10 highest sales days in its history last month and was able to protect its pricing power despite adding capacity.For the June quarter, Delta expects its revenue to rise 15% to 17% from a year earlier on capacity growth of 17%.
Delta expects an adjusted profit of $2.00 to $2.25 per share in the second quarter, with an operating margin of 14% to 16%. Analysts, in comparison, estimated a profit of $1.66 per share.
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