{"id":1553133,"date":"2022-07-13T17:50:19","date_gmt":"2022-07-13T21:50:19","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1553133"},"modified":"2022-07-13T17:50:30","modified_gmt":"2022-07-13T21:50:30","slug":"delta-warns-of-rising-costs-after-missing-earnings-estimates","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/delta-warns-of-rising-costs-after-missing-earnings-estimates\/","title":{"rendered":"Delta warns of rising costs after missing earnings estimates"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fdelta-warns-of-rising-costs-after-missing-earnings-estimates%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1553133&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Rajesh Kumar Singh<\/p>\n<p>CHICAGO (Reuters) -Delta Air Lines Inc on Wednesday posted a lower-than-expected second-quarter profit and warned that cost pressures would remain elevated through the year as it battles operational challenges, sending its shares lower.<\/p>\n<p>U.S. carriers are enjoying the strongest summer travel season in three years as more people resume regular activities including vacations. International traffic and corporate travel demand are also on a rebound, making for a profitable second-quarter for most of the major carriers.<\/p>\n<p>However, the industry\u2019s decision to let go thousands of workers at the height of the coronavirus pandemic in 2020 has left it ill-equipped to deal with a surge in consumer demand. Carriers are struggling to ramp up capacity and get operations back on a smoother track, resulting in higher operational costs.<\/p>\n<p>Delta had to cancel 3.5% of its scheduled flights last month. The flight disruptions along with higher fuel costs resulted in a profit below Wall Street estimates.<\/p>\n<p>The company\u2019s headcount has reached 95% of pre-pandemic levels, but training backlogs have left it short-staffed.<\/p>\n<p>Chief Executive Ed Bastian said the company now expects to reach pre-pandemic capacity by the summer of 2023. He added that  Delta will maintain its capacity in line with its resources in order to restore operational reliability. <\/p>\n<p>Delta expects to spend over $700 million this year in overtime and premium pay, 50% higher than in 2019. As a result, its full-year non-fuel costs are now estimated to be eight percentage points above the company\u2019s initial forecast.<\/p>\n<p>Peter McNally, an analyst for Third Bridge, said elevated operational costs would pressure Delta\u2019s earnings in coming quarters as well.<\/p>\n<p>\u201cInflation is a major headache for all industries and the airline business is not immune to rising costs,\u201d he said.<\/p>\n<p>Delta shares, which had been down more than 8%, trimmed those losses and were off about 6% at $29.24.<\/p>\n<p>Airline shares have been battered in recent weeks on concerns that higher air fares, a worsening economic outlook, persistently high inflation and rising interest rates could dent travel spending in the second half of the year.<\/p>\n<p>Delta, however, said it has not seen any meaningful pullback in consumer demand and fall travel bookings have been strong.<\/p>\n<p>The Atlanta-based carrier said resilient travel demand will result in solid third-quarter earnings and a \u201cmeaningful\u201d profit for the full-year despite inflationary pressure.<\/p>\n<p>\u201cLooking forward, we\u2019re in pretty good shape,\u201d Bastian said in an interview. \u201cThe demand is going to continue to hold fairly well through the fall and into the winter.\u201d<\/p>\n<p>The company\u2019s third-quarter operating margin is estimated to be in the range of 11%-13%. It expects revenue for the September quarter to be up as much as 5% from 2019, even as its capacity is projected to be down 15%-17%. <\/p>\n<p>Delta posted an adjusted second-quarter profit of $1.44 per share, 29 cents below Wall Street estimates, according to  Refinitiv. The company reported $13.8 billion in revenue for the quarter.<\/p>\n<p> (Reporting by Rajesh Kumar SinghEditing by Bill Berkrot)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2725913\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/07\/tagreuters.com2022binary_LYNXMPEI6C0DX-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI6C0DX-VIEWIMAGE\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2725916\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/07\/tagreuters.com2022binary_LYNXMPEI6C0DU-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI6C0DU-VIEWIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Rajesh Kumar Singh CHICAGO (Reuters) -Delta Air Lines Inc on Wednesday posted a lower-than-expected second-quarter profit and warned that cost pressures would remain elevated through the year as it<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1553133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1553133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1553133"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1553133\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1553133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1553133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1553133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}