By Charlotte Seet
Delta Air Lines Reports First Quarterly Profit Since 2019
Fleet renewals have been an essential step in many airlines’ recovery strategies as they fly through the storm brought about by the Covid-19 pandemic, which has resulted in numerous accelerated aircraft retirements and extended delays in production.
Some airlines have used it to their advantage — and Delta Air Lines is an example, having used the pandemic as an opportunity to simplify its current fleet and quicken the retirements of 18 widebody aircraft — which included the older Boeing 777s — as well as the MD-88s and MD-90 narrowbody fleets as they were less efficient.
Delta announced on Tuesday that it had entered into agreements to add 29 second-hand Boeing 737-900ER aircraft and to lease seven second-hand Airbus A350-900s as a part of its current initiative to modernize its fleet.
The A350s will be leased from AerCap, and the 737-900ERs ar being sold by Castlelake, L.P. Delivery of these aircraft is expected to be completed by the first quarter of 2022 and will only enter flight service once modifications, including total cabin overhauls, are completed.
Including the seven leased A350s, Delta currently has 15 A350s in its fleet and another 20 on order from Airbus. And with the addition of the 29 leased 737-900ERs, it brings the airline’s total total to 159.
These 36 aircraft were selected for their improved fuel efficiency and bigger cabin capacity to allow for Delta to enhance the customer experience for its passengers.
“These aircraft are an investment in Delta’s future,” said Delta Chief Executive Officer Ed Bastian in a statement. “As we look past the pandemic, Delta’s disciplined, innovative approach to fleet renewal positions us for growth as travel demand returns
, while enhancing the customer experience and supporting our sustainability commitments.”
Fleet renewal has been one of the main pillars of Delta’s recovery, helping to position it for sustained profitability and foreseeable growth in the future. And it seems that the recovery pillars have been working as of late, as the airline announced on Wednesday that for the first time since 2019, it had earned a profit, posting net income of $652 million for the quarter from March-June.
“We achieved significant milestones in the quarter including a solid pre-tax profit in the month of June, positive free cash flow for the June quarter, and our people and our brand being recognized with the top spot in the J.D. Power 2021 Airline Study,” Bastian said in the statement.
The profit — which happened with the help of federal Covid-19 aid to stave off some expenses — breaks a five-quarter streak of losses for the Atlanta-based carrier, and it is carrying on a positive outlook for the next quarter as domestic leisure travel has readily recovered, and business travel is expected to make a partial return before the end of the year.
Although the quickening pace of recovery has been welcomed by the airlines, it has not come without its difficulties, as at times passenger demand has exceeded the manpower available in terms of both ground and flight crews.
Hence, Delta is continuing to make investments to support its recovery strategies, such as the current fleet renewal initiative and the opening of a recruitment drive for over 1,000 pilots by next year.
“Looking forward, we are harnessing the power of our differentiated brand and resilient competitive advantages to drive towards sustainable profitability in the second half of 2021 and enable long-term value creation,” Bastian said.