Delta posts first quarter loss but expects to break even by June

London (Quantum Commodity Intelligence) - Delta Air Lines posted a net first quarter loss of $1.18 billion Thursday, but expects to break even in June as travel demand rebounds from the Covid-19 slump.

The airline's foray into the refinery sector has weighed on the bottom line, with the 185,000 b/d Trainer plant in Pennsylvania reporting a $125 million operating loss for the first quarter, its worst since Delta acquired the idled refinery from ConocoPhillips and began operating it in late 2012.

Trainer added 23 cts/gal to Delta's adjusted average fuel price in the last three months of 2020, when the refinery reported a loss of $102 million.

The refinery is expected to post another loss in the second quarter.

But Delta is upbeat about the rest of the year after passenger bookings doubled in March from January.

The US aviation market is recovering faster than Europe.

Domestic flights in the US were down 29% year-on-year while international traffic was down 42% on April 13, according to data from Eurocontrol.

In Europe, domestic flights were down 67% year-on-year, while international flights were still 67% below.

The aviation market is expected to be the slowest sector to recover from the pandemic, and poor jet fuel demand will drag on the oil complex.

Compared to jet fuel demand of 7.9 million b/d in 2019, aviation fuel consumption will continue to lag by more than 2 million b/d during the first and second quarter this year and will likely remain between 5.4 million b/d and 5.7 million b/d, Energy Aspects forecast earlier this year.