Delta Air Lines Inc. said it expects to generate a pretax profit in the second half of 2021, driven by recovering demand for leisure, corporate and Transatlantic flights after a long period of weakness caused by the coronavirus pandemic. In a presentation prepared for an investor conference, the airline said it now expects its June quarter pretax loss to range from $1.0 billion to $1.2 billion, down from prior guidance of $1.0 billion to $1.5 billion. The company expects revenue for the quarter to fall 50% to 52% to $6.0 billion to $6.2 billion, compared with prior guidance of down 50% to 55%. Domestic leisure travel is expected to be more than 100% restored in June, up from 60% in March. “Forward premium revenue growth is outpacing main cabin and upsell rates are improving,” the airline said. “Continued leisure, growing corporate and initial Transatlantic demand drive next leg of recovering in the second half of 2021, with remaining long-haul international expected to recover in 2022.” Delta is expecting its average fuel price per gallon to range from $2.10 to $2.15, compared with earlier guidance of $1.85 to $1.95. It expects capex of about $500 million, unchanged from earlier guidance, and adjusted net debt of $19.0 billion, compared with earlier guidance of $19.0 to $19.5 billion. The airline is now exploring additional ways to delever its balance sheet, after the initial phase of debt reduction was completed. Shares were down 1.6% premarket, but have gained 19% in the year to date, while the U.S. Global JETS ETF has gained 22% and the S&P 500 has gained 12%.
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