Delta Air Lines swings from profit to a 247 million loss in the first quarter

The US airline Delta Air Lines reported a net loss of 289 million dollars (247.13 million euros) in the first quarter, hampered by a sharp rise in fuel costs despite revenue growth. During this period, Delta Air Lines recorded a turnover of 15.9 billion dollars (13.60 billion euros), a 13% increase compared to the previous year. In mid-March, CEO Ed Bastian had revised revenue forecasts upwards, raising the range to 7% to 9% on a comparable basis, up from 5% to 7% previously, citing a significant increase in sales, particularly in March. Sales were driven by the 'premium, corporate, and loyalty' segments, the group indicated. Conversely, net income fell by 529 million dollars (452.53 million euros), moving into the red with a loss of 289 million dollars. For the second quarter, the group expects a pre-tax profit of 'about one billion dollars (855 million euros)', despite an increase of more than 2 billion dollars (1.71 billion euros) in fuel expenses. 'Although the recent rise in fuel prices is currently weighing on results, I am convinced that this environment ultimately reinforces Delta's leadership and accelerates its long-term profitability,' Ed Bastian stated in a press release. These figures demonstrate 'the strength of the economic model' of Delta Air Lines, analysts at TD Cowen estimated in a note. The airline has the unique feature of owning its own refinery. Expenses related to the refinery increased by 56%, and those related to fuel and inherent fees recorded a 14% rise. The company had already indicated that the increase in fuel prices, associated with the conflict in the Middle East, had resulted in an estimated additional cost of 400 million dollars in March. 'Our integrated fuel strategy is a unique differentiator, as the profitability of our refinery partially offsets the increase in refining margins; at current prices, the refinery should bring a benefit of 300 million dollars for the second quarter,' highlighted Dan Janki, who was the CFO of Delta Air Lines until the end of March, in the statement. On Tuesday, an agreement was reached between Iran and the United States on a two-week ceasefire in exchange for the reopening of the Strait of Hormuz, which had been blocked by Tehran since the beginning of US and Israeli attacks in late February. Delta Air Lines launches Porto/New York route on May 22.