Delta expects Biden administration to soon drop pre-departure Covid testing requirement for flyers entering US
“Hopefully that’s canceled in the next few weeks. We’re hearing good things from Washington,” Delta Chairman Glen Hauenstein told analysts during the company’s first-quarter earnings call on Wednesday.
His claim was later backed up by Delta’s chief legal officer, Peter Carter, who said the airline was in regular contact with the administration.
“We’re getting a strong indication that pre-departure testing will be phased out in the near future, which is quite encouraging,” Carter said.
The US travel industry, including airlines, has called for the testing requirement to be removed. Industry advocates argue that the requirement no longer serves a meaningful public health purpose, but puts the US at a disadvantage by driving visitor traffic compared to countries like the UK and Canada, which eliminated pre-entry testing.
Hauenstein also said the requirement continues to impact international travel demand among U.S. residents, with some worrying about the risk of being stranded abroad if they test positive for the virus.
Hauenstein said he thinks eliminating the requirement is one of the last hurdles for Delta in terms of holding back the pandemic. Other remaining hurdles include maintaining entry bans in place in Japan and China.
Delta took off after omicron withdrawal
Delta issued a bullish report on its first quarter results and a confident outlook for the second quarter.
The carrier suffered a net loss of $940 million in the first quarter. But as the omicron wave of Covid-19 waned, the carrier’s fortunes took an abrupt turn from President’s Day.
In March, Delta achieved a 10% operating profit while recording more total revenue per available seat mile (TRASM) than in 2019 for the first time since the pandemic began.
March also brought Delta records for monthly direct sales, monthly freight revenue and monthly co-branded credit card spending.
For the first quarter, the carrier recorded revenue of $9.35 billion, down 25% from 2019 on flight capacity down 17% from 2019. This revenue exceeded analysts’ expectations of $360 million, according to the investment website. Looking for Alpha.
Impacted by soaring fuel prices and rising labor costs, Delta’s operating expenses in the March quarter were $10.13 billion, up 7% from compared to 2019.
For the second quarter, Delta expects an operating profit margin of 12% to 14%. That’s just four percentage points behind the June 2019 quarter, CEO Ed Bastian noted, even as fuel prices have soared and the carrier plans to fly only 84% of 2019 capacity.
Delta expects second-quarter revenue to be 93% to 97% of the 2019 level.
Despite strong demand, the airline expects little to no capacity growth in the second quarter compared to 2019. This conservative approach, at least in part, is aimed at avoiding flight cancellations and the wave of late arrivals that have plagued other airlines. , more recently Alaska, JetBlue and Spirit.
“The priority is to operate reliably and the other priority is not to outpace demand,” Hauenstein said.