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Delta Air Lines (DAL - Free Report) improved its guidance for the second quarter as air-travel demand continues to rebound.
The company expects June quarter's adjusted total revenues to be fully restored to the 2019 level. Previously, the airline had expected the same to have recovered 93-97% from the 2019 level. DAL anticipates total unit revenues to increase seven to eight points from what it had initially expected. The upside is due to higher travel demand and pricing. However, the carrier now expects capacity to be 82-83% of the second quarter of 2019 compared with the previous expectation of 84% of the 2019 level.
Operating margin is predicted to be 13-14% compared with the previous guidance of 12-14%. The guided range is less than the 2019 level by three to four points due to lower capacity and higher fuel prices. Fuel price per gallon is now estimated to be $3.60-$3.70 in the second quarter, higher than the previous guidance of $3.20-$3.35.
Delta, flaunting a Zacks Rank #1 (Strong Buy), expects free cash flow to be $1.5 billion in the second quarter while it estimates adjusted net debt of less than $20 billion. Due to reduced capacity, higher selling expenses and investments in operational reliability, DAL has increased its non-fuel unit cost view. It expects cost per available seat miles (CASM), excluding fuel, to climb 20-22% in the second quarter from the comparable period in 2019 (previous expectation: increase of around 17%). You can see the complete list of today’s Zacks #1 Rank stocks here.
Given the continued improvement in domestic leisure travel demand and uptick in business and international travel, U.S. airlines have been seeing steady rise in bookings for the summer. Consequently, Southwest Airlines (LUV - Free Report) and JetBlue Airways (JBLU - Free Report) have also improved their respective June quarter forecasts.
For the second quarter, Southwest expects operating revenues to increase 12-15% from the comparable period in 2019. Previously, the company expected the same to rise 8-12%. LUV attributed its improved guidance, despite escalating fuel prices, to continued strength in passenger yield.
Southwest, sporting a Zacks Rank #1, still anticipates capacity, measured in available seat miles (ASMs), to decline 7% in the second quarter. The company continues to expect cost per available seat mile (CASM), excluding fuel, to increase 14-18% in the current quarter from the comparable period in 2019.
JetBlue, carrying a Zacks Rank #4 (Sell), has been seeing steady improvement in its operational performance following the investments it had made to improve operations for the summer. With improved completion factor despite weather and air traffic control disruption, JBLU now expects its capacity to increase 2-3% in the second quarter compared with the 2019 level from 0-3% estimated earlier.
Owing to the strong demand environment and expectations of June revenue per available seat mile (RASM) to increase more than 20% from the 2019 level, JetBlue anticipates second-quarter revenues to climb at or above the high end of the previously guided range of 11-16%.
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Delta (DAL) Raises Q2 Revenue View, Lowers Capacity Guidance
Delta Air Lines (DAL - Free Report) improved its guidance for the second quarter as air-travel demand continues to rebound.
The company expects June quarter's adjusted total revenues to be fully restored to the 2019 level. Previously, the airline had expected the same to have recovered 93-97% from the 2019 level. DAL anticipates total unit revenues to increase seven to eight points from what it had initially expected. The upside is due to higher travel demand and pricing. However, the carrier now expects capacity to be 82-83% of the second quarter of 2019 compared with the previous expectation of 84% of the 2019 level.
Operating margin is predicted to be 13-14% compared with the previous guidance of 12-14%. The guided range is less than the 2019 level by three to four points due to lower capacity and higher fuel prices. Fuel price per gallon is now estimated to be $3.60-$3.70 in the second quarter, higher than the previous guidance of $3.20-$3.35.
Delta Air Lines, Inc. Price
Delta Air Lines, Inc. price | Delta Air Lines, Inc. Quote
Delta, flaunting a Zacks Rank #1 (Strong Buy), expects free cash flow to be $1.5 billion in the second quarter while it estimates adjusted net debt of less than $20 billion. Due to reduced capacity, higher selling expenses and investments in operational reliability, DAL has increased its non-fuel unit cost view. It expects cost per available seat miles (CASM), excluding fuel, to climb 20-22% in the second quarter from the comparable period in 2019 (previous expectation: increase of around 17%). You can see the complete list of today’s Zacks #1 Rank stocks here.
Given the continued improvement in domestic leisure travel demand and uptick in business and international travel, U.S. airlines have been seeing steady rise in bookings for the summer. Consequently, Southwest Airlines (LUV - Free Report) and JetBlue Airways (JBLU - Free Report) have also improved their respective June quarter forecasts.
For the second quarter, Southwest expects operating revenues to increase 12-15% from the comparable period in 2019. Previously, the company expected the same to rise 8-12%. LUV attributed its improved guidance, despite escalating fuel prices, to continued strength in passenger yield.
Southwest, sporting a Zacks Rank #1, still anticipates capacity, measured in available seat miles (ASMs), to decline 7% in the second quarter. The company continues to expect cost per available seat mile (CASM), excluding fuel, to increase 14-18% in the current quarter from the comparable period in 2019.
JetBlue, carrying a Zacks Rank #4 (Sell), has been seeing steady improvement in its operational performance following the investments it had made to improve operations for the summer. With improved completion factor despite weather and air traffic control disruption, JBLU now expects its capacity to increase 2-3% in the second quarter compared with the 2019 level from 0-3% estimated earlier.
Owing to the strong demand environment and expectations of June revenue per available seat mile (RASM) to increase more than 20% from the 2019 level, JetBlue anticipates second-quarter revenues to climb at or above the high end of the previously guided range of 11-16%.