Delta Expects Meaningful Profitability In 2022

Delta Air Lines, Inc. DAL presented its strategic priorities at its Capital Markets Day for the investor community.

• Delta expects to deliver meaningful profitability in 2022 on its path to improved earnings power beyond pre-pandemic levels by 2024.
• The airline set its top financial priority of restoring its financial foundation, focusing on efficiency and cash generation to achieve investment grade metrics by 2024.
• "As our profitability improves, we are focused on reducing debt and strategically investing to build on our leadership position," commented Delta CFO Dan Janki.
• Delta now expects to generate an adjusted pre-tax profit of ~$200 million in the December quarter. It introduced financial targets for 2022, 2023, 2024.
• Delta expects to achieve Available seat miles of ~90% in 2022, ~100% in 2023, and +100% in 2024 compared to 2019.
• NF CASM is expected to be up 7% - 10% in 2022, Up Low - Mid-Single Digits in 2023, and Up Low Single Digits in 2024.
• Fuel ($ / gallon) is expected to be $2.20 - $2.30 for all the three years.
• Gross Capital Expenditures of ~$6 billion in 2022, ~$5 billion - $5.5 billion in 2023, and ~$4.5 billion - $5 billion in 2024.
• Delta expects FY24 Total Adjusted Revenue, ex-Refinery, over $50 billion, EPS to be greater than $7, Free Cash Flow of over $4 billion, and Adjusted Net Debt of ~$15 billion.
• It also expects FY24 operating margin in mid-teens, operating cash flow over $9 billion, adjusted debt / EBITDAR 2.0x - 3.0x; 2024 ending liquidity of $5 billion - $6 billion, and ROIC in the mid-teens.
• Price Action: DAL shares are trading lower by 1.00% at $36.25 on the last check Thursday.