Delta to share profits with staff for first time since pandemic began

Delta Air Lines will share profits with staff for the first time since the onset of the pandemic after a sharp recovery in profits in the second half of last year.

The US carrier will award staff $108m, which works out at $1,250 for each employee who worked throughout the year, as the company used some of its pre-tax profits in the second half to reward workers.

“We’re really proud of our team of people who delivered” six months of profits “and as a result we’ve made a special change in our plan to accommodate payment”, chief executive Ed Bastian told the Financial Times.

The Atlanta-based carrier, the third largest in the US, suffered pre-tax losses of $3.4bn and net losses of $2.6bn on operating revenues of $26.7bn on an adjusted basis in 2021. Adjustments include government grants, impairments and unrealised losses on investments.

Using GAAP, the accounting standard used in the US, the airline made pre-tax profits of $398m and net profits of $280m on operating revenues of $30bn in 2021.

In the fourth quarter, it made pre-tax profits of $170m and net profits of $143m on operating revenues of $8.4bn on an adjusted basis. Using GAAP, it suffered losses of $395m and net losses of $408m on operating revenues of $9.4bn.

The airline last shared profits in the fourth quarter of 2019, when it paid out $387m. The company enjoyed record profit sharing that year, disbursing a total of $1.6bn to its then 90,000 employees.

Bastian said that Omicron had pushed back its recovery by an estimated 60 days, with that number climbing to 90 days for business travel after flight rosters were ravaged globally by tens of thousands of cancellations.

Cancellations have fallen sharply in the past seven days, however. An average of about 1 per cent of worldwide flights were cancelled due to the variant over this period, down from about 5 per cent during the Christmas holiday period, Bastian added.

The airline remains confident in pent-up demand for leisure and business travel and expects a recovery to pick up around President’s Day in late February, it said in its earnings release.

It forecasts revenue in the first quarter of 2022 to stick around 72 per cent to 76 per cent of 2019 levels after hitting 74 per cent in the fourth quarter of 2021. This takes account of Omicron disruption.

Bastian noted that Delta has about 80 per cent of the operational capacity of the first quarter of 2019.

He also predicted a healthy 2022 for business travel “based on discussions with corporate customers as well as what we’re seeing in our data”.

In addition, he is confident of a return to international travel, which he thinks will take about a year longer to recover than domestic trips for both consumer and business flyers.

“We expect we’ll have a good summer internationally in the north Atlantic,” he said.

Travel to Asia and other parts of the world, however, “may not recover until sometime in 2023 or beyond”.

Bastian also highlighted the hit to company staff from coronavirus.

“We had a significant number of employees, somewhere around 8,000, over the last four weeks that have contracted the virus,” he said.

“We seem to have crossed the line where we have more people coming back” than “people coming down with the virus”.

Of Delta’s current workforce of about 75,000, more than 95 per cent are vaccinated, or with an approved exemption.