Delta Air Lines will share profits with staff for the first time since the start of the pandemic after a sharp recovery in profits in the second half of last year.
The U.S. airline will allocate $ 108 million to staff, working out to $ 1,250 for every employee who worked through 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 ‘made a six-month profit’ and as a result we’ve made a special change in our plan to accommodate payment,” CEO Ed Bastian told the Financial Times.
The Atlanta-based airline, the third largest in the U.S., suffered pre-tax losses of $ 3.4 billion and net losses of $ 2.6 billion on operating income of $ 26.7 billion on an adjusted basis in 2021. Adjustments include government grants, impairments and unrealized losses on investments.
Using GAAP, the accounting standard used in the US, the airline made a pre-tax profit of $ 398 million and a net profit of $ 280 million from operating income of $ 30 billion in 2021.
In the fourth quarter, he made a profit before tax of $ 170 million and a net profit of $ 143 million on operating income of $ 8.4 billion on an adjusted basis. Using AARP, it suffered losses of $ 395 million and net losses of $ 408 million on operating income of $ 9.4 billion.
The airline last shared profits in the fourth quarter of 2019, when it paid out $ 387 million. The company enjoyed record profit sharing that year and paid out a total of $ 1.6 billion to its then 90,000 employees.
Bastian said Omicron had pushed back its recovery by an estimated 60 days, with that number climbing to 90 days for business travel after flight schedules worldwide were devastated by tens of thousands of cancellations.
However, cancellations have dropped sharply over the past seven days. An average of about 1 percent of global flights have been canceled due to the variation over this period, down from about 5 percent during the Christmas holiday period, Bastian added.
The airline remains confident in the pent-up demand for leisure and business travel and expects a recovery around President’s Day to pick up at the end of February, he said in his earnings statement.
It predicts revenue will remain around 72 percent to 76 percent from 2019 levels in the first quarter of 2022 after reaching 74 percent in the fourth quarter of 2021. This takes into account Omicron disruption.
Bastian noted that Delta has about 80 percent of the operating capacity of the first quarter of 2019.
He also predicted a healthy 2022 for business travel “based on conversations with corporate clients as well as what we see 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 travel for both consumer and business aircraft.
“We expect to have a great summer internationally in the North Atlantic,” he said.
However, travel to Asia and other parts of the world will “not recover until 2023 or thereafter”.
Bastian also stressed the impact of coronavirus on company staff.
“We’ve had a significant number of employees over the past four weeks, somewhere around 8,000, who have contracted the virus,” he said.
“We seem to have crossed the line where more people are coming back” than “people coming down with the virus.”
Of Delta’s current workforce of about 75,000 is more than 95 percent vaccinated, or with an approved release.