Delta Air Lines Q1 2022 Earnings Report Recap

DAL missed on earnings but beat on revenue

Key Takeaways

  • Delta's load factor came in below analysts' expectations.
  • Load factor is a key metric showing the percentage of a carrier's available seats that are filled with paying passengers.
  • Delta expects revenue for Q2 FY 2022 to recover to about 93% to 97% of its levels in FY 2019.
Delta Air Lines Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted Earnings Per Share Miss -$1.23 -$1.22 
Revenue Beat $9.3B $8.8B
Load Factor Miss 75% 76.7%

Source: Predictions based on analysts' consensus from Visible Alpha

Delta Air Lines (DAL) Financial Results: Analysis

Delta Air lines reported mixed earnings results for Q1 FY 2022. The airline reported an adjusted loss per share that was slightly larger than analysts expected. Delta noted that profitability returned in the month of March amid a rebound in travel demand after it had been weakened by the spreading of the omicron variant of the coronavirus. The company's revenue beat analyst estimates, up 111.3% year over year (YOY). However, revenue is still below its pre-pandemic levels. The airline's load factor also missed analyst expectations.

The company's shares were up more than 6% in pre-market trading. Over the past year, Delta's shares have provided a total return of -20.9%, well below the S&P 500's total return of 6.5%.

DAL Load Factor

Delta's load factor was 75% for the first quarter, up significantly on a YOY basis but down more than three percentage points from the previous quarter. Load factor is a key metric indicating the percentage of a carrier's available seats that are filled with paying passengers. A high load factor, as opposed to a low load factor, indicates that a high percentage of seats are occupied by passengers. Because the costs of sending an aircraft into flight are relatively the same whether there are 50 people aboard or 100, airlines have a strong incentive to fill as many seats as possible by selling more tickets. Higher load factors mean an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable.

Travel demand has continued to recover after it was decimated in 2020 amid the pandemic. Delta's load factor gradually increased from a low point of 34.2% in Q2 FY 2020 to a recent high of 79.6% in Q3 FY 2021. It then slipped to 78.1% in the final quarter of FY 2021 and has ticked down again in the most recent quarter. These downward movements in Delta's load factor suggest that the recovery in travel demand has slowed and still has some ways to go before the airline's load factor can return to pre-pandemic levels of more than 85%.

DAL Outlook

Delta said that it expects revenue for Q2 FY 2022 to recover to around 93% to 97% its level in FY 2019. The airline expects demand to continue to recover through the second half of the year. However, Delta noted that rising fuel costs would be a headwind.

Delta's next earnings report (for Q2 FY 2022) is expected to be released on July 14, 2022.

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  2. Visible Alpha. "Financial Data."

  3. TradingView. "Price Chart: DAL and S&P 500."

  4. "Delta Air Lines Inc (DAL): Financials—Earnings."

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