Delta loses $940 million in Q1, but bookings, revenue, surge

Delta Air Lines lost $940 million in the first quarter, hurt by a rise in fuel prices, but bookings surged in recent weeks, setting up a breakout summer as Americans try to put the pandemic behind them.

Wall Street had expected the loss in a quarter marred by the omicron variant of COVID-19. Investors focused Wednesday on Delta's upbeat outlook for the rest of the year.

Shares of the Atlanta-based airline jumped more than 4% in morning trading, and American, United and Southwest all gained between 5% and 9%.

Delta still faces stiff headwinds, including the rise in fuel and labor costs. And it is not clear whether spiking inflation will cause consumers to pull back on travel spending.

On Tuesday, the U.S. reported that in the past year inflation rose at its fastest pace since 1981, led by soaring energy prices. Jet fuel is Delta's second-largest cost after labor.

Delta's jet fuel costs rose 33% from just the last quarter. Total adjusted operating expense reached $9 billion in the first three months of the year, up 11% sequentially due to fuel prices and the cost of ramping up operations from the pandemic.

So far, though, neither inflation, the ongoing pandemic nor Russia's war against Ukraine seem to be having any impact on ticket sales. Delta officials say that bookings started to rise in late February and have kept going.

“The last five weeks have been the highest bookings in our history,” CEO Ed Bastian said in an interview. “I think that's an indication that people are through with the virus. They feel they have all the tools and the technology to manage it.”

Bastian said he expects travel demand to remain strong for two to three months — about as far into the future as airlines care to venture.

"Then, when we get to the fall, that will be the next inflection...