Delta posts 4Q loss, but airline employees to get bonus checks
ATLANTA — Delta Air Lines said it plans to give employees $1,250 bonuses after a tumultuous year and challenging holiday period.
The Atlanta-based airline reported Thursday a $408 million net loss in the fourth quarter. For the full year it eked out $280 million in net income, thanks to $4.5 billion in federal relief funding.
Delta announced a “special profit-sharing payment” to be paid on Valentine’s Day to its employees, who had for years benefited from bigger profit-sharing bonuses before the pandemic hit.
Delta predicted the omicron variant of COVID-19 will delay its financial recovery by about 60 days and result in a first-quarter loss. But it forecast profits in the last three quarters of this year and still expects a “meaningful profit” for 2022.
“We’re seeing Presidents Day forward being very healthy,” Delta CEO Ed Bastian said in an interview with The Atlanta Journal-Constitution, adding he expects omicron to affect the airline “pretty heavily” until mid-February.
Delta said about 8,000 of its more than 75,000 employees tested positive for COVID-19 in the last four weeks. The resulting staff shortages, combined with winter storms and surging holiday traffic, triggered thousands of flight cancellations between Christmas and New Year’s.
“We’re already probably well past the peak as affecting our own staff,” Bastian said. “Things are moving in a good direction for us. The doctors have told us it will decline as rapidly as it appeared and they seem to be right.”
The airline will pay out $1,250 to each employee who was with the company through its profitable second half of 2021, “in recognition of the fact that everyone has worked very hard through this very, very difficult year,” Bastian said.
Many employers — including airlines — have struggled to retain staff or fill job openings during the pandemic amid worker shortages. Many are boosting pay and some are offering bonuses.
Delta’s revenue at the end of December was still down more than 20% from 2019 levels. The company nonetheless has improved its financial standing after a $12 billion net loss in 2020, when air travel plummeted in the first year of the pandemic.
There are pockets of strength and weakness in the airline’s business. While domestic passenger revenue was 78% recovered in the fourth quarter compared with 2019 levels, international passenger revenue and domestic business travel were only 50% and 60% recovered, respectively.
“We’re seeing some near-term hesitation in booking behavior, given the prominence of COVID in our daily lives,” Bastian said.
Delta had operating revenue of $29.9 billion in 2021, up from $17.1 billion in 2020 but still well below 2019 revenue of $47.01 billion.
2021 was a tumultuous year for Delta. The airline lost more than $1 billion in the first quarter. It posted a $652 million profit in the June quarter, helped by $1.5 billion in federal relief funding. It booked a $1.2 billion profit in the third quarter, fueled largely by relief money.
The $1,250 year-end payments to employees are being recorded as a $108 million expense, and pale in comparison with pre-pandemic payouts.
The last time the airline posted an annual profit was in 2019, when it had $4.8 billion in net income in a year that Bastian called the best in the company’s history, benefiting from rapid growth and low fuel costs. That led the airline to pay out $1.6 billion in profit sharing bonuses to employees in February 2020, amounting to about two months of pay.
Employees struggled through pay cuts and unpaid leaves of absence in 2020, and there was no profit sharing payout in February 2021.
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