Delta believes that the pre-departure Covid testing requirement for flyers entering the U.S. will soon be dropped by the Biden administration.
Hopefully that will be rolled back in the next few weeks. During the company's first-quarter earnings call on Wednesday, Delta president Glen Hauenstein told analysts that they were hearing good things from Washington.
Peter Carter, Delta's chief legal officer, said the airline is in regular touch with the administration.
Carter said that they are getting a strong indication that pre-departure testing will be phased out in the near future.
The testing requirement has been called for to be eliminated by the U.S. travel industry. The requirement no longer serves a meaningful public health purpose, but it does place the U.S. at a disadvantage in generating visitor traffic compared to countries such as the U.K.
The requirement continues to impact international travel demand among U.S. residents, with some worried about getting stuck abroad if they test positive for the virus.
The elimination of the requirement is believed to be one of the final barriers to putting the Pandemic in its rear view. Entry prohibitions are still in place in Japan and China.
Delta presented a bullish report on its Q1 results and a confident forecast for the second quarter.
The carrier lost $940 million in the first quarter. As the Covid-19 omicron wave subsided, the carrier's fortunes turned sharply.
Delta recorded more total revenue per available seat mile in March than it did in the previous year for the first time since the outbreak of the swine flu.
March brought Delta records in terms of monthly direct sales, cargo revenue and co- branded credit card expenditures.
Revenue for the first quarter was $9.35 billion, down 25% from the previous year, and flying capacity was down 17%. The revenue figure beat analyst expectations, according to the investment website Seeking Alpha.
Delta's operating expenses were $10.13 billion in the March quarter, up 7% from a year ago, due to surging fuel prices and rising labor costs.
Delta projects an operating profit margin of 12% to 14% for the second quarter. Even though fuel prices are up and the carrier only expects to fly 80% of capacity in the year, Ed Bastian noted that the carrier is just four percentage points behind the June quarter.
Second-quarter revenue is projected to be close to the level of 2019.
Despite strong demand, the airline is planning little to no capacity growth in the second quarter. That conservative approach is geared toward avoiding the flight cancellation and late arrivals that have plagued other airlines.
The priority is to operate reliably and the other priority is to not get ahead of demand.
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