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Delta Airlines on Tuesday it raised its forecast for the second quarter and estimated full-year adjusted earnings of $6 per share, at the very best level of estimates it reported in April last 12 months, as strong travel demand and shifts to dearer fare classes proceed to drive growth.
Delta forecasts adjusted earnings per share of $2.25 to $2.50 for the second quarter, in comparison with the previous range of $2 to $2.25 per share. CEO Ed Bastian said the corporate’s second-quarter profit, which might be released next month, could possibly be the very best ever for the April-June period.
In a presentation ahead of investors day on Tuesday, the airline also raised its estimate of generating free money this 12 months to $3 billion from $2 billion. Delta reinstated its quarterly dividend earlier this month.
“Demand, as you understand, as anyone who travels knows, is off the chain,” Delta CEO Ed Bastian told CNBC’s “Squawk Box.”
Delta and its rivals saw strong travel demand, particularly for international travel, while other sectors struggled as consumers face inflation and other challenges. The aviation industry also faced growth constraints because of shortages of air traffic controllers, delays within the delivery of recent aircraft and shortages of recent pilots, which helped keep prices regular.
But along with buoyant demand, airlines are having fun with jet fuel prices, that are down about 30% from last 12 months.
Delta forecasts that Revenue Per Available Passenger Mile, an indicator of how much money an airline makes in years to return, is anticipated to grow by as much as 18% from last 12 months, up from the previous forecast by 15% to 17%.
Delta shares rose about 1% in pre-market trading on Tuesday.