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Delta profits are strong as airlines indicate optimism about travel demand

Delta profits are strong as airlines indicate optimism about travel demand

Delta Air Lines said Thursday it has high hopes for the final three months of the year after ending its busy summer season with good profits.

Airlines Recorded a profit of 695 million dollars For the three months that ended in September, despite rising costs and Hurricane Ian disrupting travel. However, Delta’s third-quarter result was less than half the earnings it reported during the same period in 2019.

The airline reported record third-quarter revenue, after making some financial adjustments. This adjusted revenue is up 3 percent compared to the same three months in 2019, while Delta expects revenue in the last three months of the year to rise 5 to 9 percent over the same period in 2019.

“The travel revival continues as consumer spending shifts to experiences and demand improves in businesses and internationals,” Delta CEO Ed Bastian said in a statement. “In this environment, we expect revenue growth to accelerate in the December quarter versus 2019 with an operating margin of approximately 10 percent.”

Airlines have said in recent weeks that demand for travel has not slowed immediately as summer ends and economic concerns grow, as some feared. International and corporate travel, which lagged behind in recovery, showed continued improvement.

By the end of September, the airline said, Delta’s sales had returned to about 80 percent of 2019 levels. The airline said nearly 90 percent of Delta’s commercial customers said they expect to travel as much during the last three months of the year as they do In the summer quarter, if not more.

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Delta said it lost about $35 million in revenue in the third quarter due to cancellations and other disruptions caused by Hurricane Ian, which devastated parts of the southeastern United States at the end of September. The airline expects to be hit similarly this quarter by the hurricane.

American Airlines provided a preview of its results this week, saying revenue was higher than expected in the third quarter. The airline reported that revenue rose 13 percent compared to the same period in 2019, above its previous forecast of a 10 to 12 percent increase. It is expected that the US will announce its full results next Thursday.

Investors are watching closely whether consumers will respond to higher prices and economic turmoil by pulling back on travel, but airlines say they haven’t seen much of a slowdown so far. Regardless of the impact on short-term travel demand, United Airlines said this week that it is confident in the long-term outlook for international travel.

United announced, on Wednesday, an ambitious schedule of flights for the summer of 2023, including a new service to Stockholm, Dubai and Malaga, Spain. She said the demand for travel to Europe this summer is up about 20 percent from the summer of 2019. Next summer, she expects demand to rise about 30 percent from 2019.

“United offers the best of both worlds: We make it easier for our customers to visit Europe’s most popular cities, but we are also expanding our reach to give travelers access to new places they haven’t yet tried,” Patrick Coyle, a senior executive at United, said in a statement on Wednesday. “Expect another busy summer for international travel.”

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Airlines service to Europe was disrupted this summer due to staff shortages at airports and airlines. In August, London Heathrow Airport limited the daily number of departing passengers due to a shortage of workers. This cover is It is due to expire later this month. United said it was working closely with European airports to ensure they could implement their plans.

The demand for travel to Europe has been particularly strong. This is driven by leisure trips to countries such as Italy, Spain and Greece, and increased international corporate travel, Delta said. Delta said it plans to offer 8 percent more seats next summer than it did this summer and aims to restore its entire network to 2019 levels by then.