Delta posts profit despite jump in costs, vows to improve reliability after airline ‘pushed too hard’

Delta Air Lines on Wednesday reported a quarterly profit thanks to travelers willing to pay up to fly, more than making up for higher costs.

The carrier also vowed to improve reliability after an increase in delays and cancellations prompted it to scale back its summer schedule.

The airline industry “was starved for revenue for the last two years,” CEO Ed Bastian told CNBC’s “Squawk Box” on Wednesday after the carrier released results. “We pushed too hard. We scaled back a bit ... and in July we’re running a great operation.”

The company’s shares were lower in premarket trading after Delta’s adjusted results fell short of analyst estimates.

Delta said its third-quarter capacity would be 83% to 85% of 2019 levels, suggesting the airline is sticking with a conservative schedule compared with some rivals.

The company expects a third-quarter profit and reiterated its forecast for full-year profitability.

It expects to see third-quarter sales 1% to 5% higher than three years ago, along with increased costs.

Delta is the first U.S. airline to report earnings for the second quarter. United Airlines and American Airlines announce next week.

Despite issues during the start to the summer travel season, demand rose for both business and leisure travel, Delta said. 

Domestic corporate travel sales are 80% recovered from before the Covid pandemic, up 25 percentage points from the first quarter of the year, it said.

Delta’s costs for each seat it flew a mile, excluding fuel, were up 22% from 2019 for the three months ended June 30. Its fuel expense rose 41% from three years ago to $3.2 billion.