DELTA POSTS $1.2 BILLION Q3 PROFIT, TOUTS HOLIDAY BOOKINGS

Delta Air Lines posted a $1.2 billion profit for the third quarter, helped by the latest installment of federal pandemic aid for the airline industry, but warned that rising fuel prices will lead to a “modest” loss in the fourth quarter.

The airline also expects higher labor costs as it hires thousands of employees to replace some of those who left the company last year when the pandemic’s impact on travel was most brutal.

Delta shares fell more than 4% in morning trading.

The airline said that travel demand is improving after hitting a flat spot when COVID-19 infections in the U.S. jumped over the summer, fueled by the rise of the so-called delta variant.

“We are seeing bookings pick up materially over the past four or five weeks,” CEO Ed Bastian said. “As the variant has receded, people are starting to get back out.”

Business and international travel continue to lag, however — corporate travel stalled at about 40% of its pre-pandemic level. Airlines are hoping for a boost as more workers return to their offices and as the U.S. relaxes border restrictions in November.

Delta is rebuilding more of its previous schedule. The airline operated at 71% of its 2019 passenger-carrying capacity in the third quarter and expects that to rise to 80% in the fourth quarter. That will help revenue rise slightly, to more than 70% of where it stood in late 2019, the airline forecast.