Delta Air Lines said on Thursday that it lost $408 million in the final three months of last year, as the Omicron variant of the coronavirus, which emerged late in that period, interfered with holiday operations and pushed back the airline’s recovery.
About 8,000 Delta employees — more than one in 10 — had called out sick in recent weeks, Delta’s chief executive, Ed Bastian, said on CNBC on Thursday. That, combined with bad storms, forced the airline and its peers to cancel tens of thousands of flights over the busy holiday travel period, with carriers only just beginning to recover in recent days.
“While the rapidly spreading Omicron variant has significantly impacted staffing levels and disrupted travel across the industry, Delta’s operation has stabilized over the last week and returned to preholiday performance,†Mr. Bastian said in a statement. “We are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel.â€
The Omicron variant has delayed the airline recovery by about 60 days, Mr. Bastian said. Delta alone scrubbed more than 2,000 flights over the two weeks starting on Christmas Day, the fourth-most flight cancellations among U.S. airlines.
United Airlines, which canceled more than 2,500 flights over that period, said this week that about 3,000 employees, more than 4 percent of its staff, had recently tested positive for the virus. At one point over the holidays, nearly a third of United employees called out sick at Newark Liberty International Airport, a major hub for United. Almost all employees at both airlines are vaccinated.
Despite the airline’s difficult year, Delta said it would spend about $100 million to distribute bonuses of $1,250 to each of its 75,000 employees.
“It’s going to be our recognition and our gesture of thanks to you for the hard work and the sacrifice and the service you’ve made on behalf of our company and on behalf of our customers,†Mr. Bastian said in a video message to employees announcing the bonuses, which will be distributed on Feb 14.
Shortly before Christmas, Delta warned the Centers for Disease Control and Prevention that the virus could disrupt holiday travel and asked the agency to shorten its recommended isolation time for people who test positive for the virus, a move also supported by some public health experts. The agency made that change days later, setting off a feud between Delta and one of the nation’s most prominent airline labor unions, which said shortened isolation periods put workers and travelers at risk.
Although carriers finally recovered from the holiday disarray this week, Omicron is expected to weigh on travel in the coming months, Delta’s president, Glen Hauenstein, said in the statement.
“The recent rise in Covid cases associated with the Omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from Presidents’ Day weekend forward,†he said.
The airline expects losses in January and February and a return to profitability in March, with revenue over those three months expected to be about 72 to 76 percent of the level in a similar period in 2019. The airline’s revenue in the final quarter last year was about 74 percent of that in the last quarter of 2019.
Despite an expected loss in the first quarter of this year, the airline said it expected to report a profit over the rest of 2022.
Delta also said it eked out a small $208 million profit for 2021, a feat that would have been impossible without $4.5 billion in federal relief to pay workers. The airline lost nearly $12.4 billion in 2020 and had a profit of about $4.8 billion the year before.
Delta is the first major airline to report its fourth-quarter financial results. American Airlines and United are expected to announce next week, followed by Southwest Airlines the week after.
