The shares of Delta Air Lines (NYSE: DAL) have remained relatively flat since April despite a sizable contraction in broader markets. Rising energy costs and skyrocketing inflation have taken a toll on growth and profitability metrics of the transportation industry, but strong air travel demand is likely to drive DAL stock as macroeconomic tensions ease. While the geopolitical uncertainty due to the Russia-Ukraine war is jeopardizing global economic growth and triggering measures such as new energy security alliances, passenger numbers at TSA checkpoints are a positive indicator for the airline industry. Moreover, Delta Air Lines
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How did Delta Air Lines perform in 2021 and Q1 2022?
In 2021, Delta Air Lines reported $29.9 billion of total revenues and $3.2 billion of operating cash assisted by PSP-2 and PSP-3 (payroll support program) proceeds. The company’s operating metrics reached pre-pandemic levels during the latter part of the year as declining infection rates pushed travel demand. In H1 2021, the company’s ASMs (available seat miles), occupancy rate, and yield (cents) were 88k, 58%, and 15.79, respectively. For the full-year, ASMs (available seat miles), occupancy rate, and yield (cents) reached 194k, 69%, and 16.72, respectively. While the demand factors improved during fall and winter, inflationary pressures from the Russia-Ukraine war and supply chain hurdles created macroeconomic headwinds for the airline…