Edward H. Bastian
Chief Executive Officer & Director at Delta Air Lines
Well, thank you, Julie. Good morning, everyone. I really appreciate you joining us today.
Before getting into the December quarter results and outlook, I want to spend a couple of minutes discussing the current environment. As everyone is aware, the Omicron variant has significantly impacted our people, our customers and our operation, as well as most parts of society over the last three weeks. The combination of the rapid spread of the variant at the peak of a strong holiday demand period and in the face of extreme winter condition in parts of the country created some of the most difficult travel conditions that we ever remember experiencing. I'm incredibly appreciative of the great work that our front-line team has done and continue to do to help our customers get to where they need to be as safely and quickly as possible no matter the circumstances. Our teams have faced these difficulties head on, while also managing the impact of the virus in their own lives. And I want to thank every member of the Delta team for your work during a very challenging period.
To our customers who have been affected, we appreciate your patience and your understanding. The good news is that over the past seven days, our operation has stabilized with Omicron related cancellations impacting only about 1% of our flights. And since Sunday, the number of Omicron affected cancellations are around 20 a day out of nearly 4,000 daily flights. And in fact, yesterday, we only had two Omicron-related mainline cancellations. While the new variant is not done, it appears that the worst may be behind us. Based on how quickly the case counts have risen, our medical team expects cases to peak in the US over the next few days, followed by a steep decline in cases. And we're already starting to see that happen amongst our own staff.
Given the high transmissibility and lower severity of Omicron, this variant is likely to mark the shift in COVID-19 from being a pandemic to a manageable and ordinary seasonal virus, which should accelerate the path to a normalized environment. When we spoke last month about Omicron as a risk in Capital Markets day, a lot was unknown. Today we know a lot more. And while the first 60 days of the year will be impacted, we're confident that the face of travel recovery will resume its December trajectory as we move into President's Day weekend and a strong spring and summer travel season are ahead of us.
So as we reflect on 2021, it was a year like no other for Delta. While challenging, we made significant progress in our recovery. At Capital Markets Day, we highlighted that our competitive strengths have deepened through the course of the past two years, and I'm extremely proud of our entire team for all their efforts. Full year revenue of $27 billion in 2021 improved nearly $11 billion or 67% from 2020 with the rate of recovery accelerating from only 25% as measured against 2019 at the start of the year to a close of the year of nearly 80% as we exited December. This resulted in a full year 2021 pretax loss of $3.4 billion.
And while we obviously have still much work ahead of us, our pretax results improved by $5.5 billion versus 2020 and included a profit of around $400 million for the second half of this year. This performance positions Delta as the only major US airline to achieve second half profitability and demonstrates that we have significant momentum in the continued restoration of our financial foundation.
Sharing our success is one of the pillars of Delta's culture, which is why we are happy to announce this morning a special profit sharing payment for all global employees. On February 14th, the vast majority of our people will receive a payment of $1,250. This is a well-earned recognition for the incredible work they have done over the past year to move our airline through the crisis and position us for recovery.
Turning to December quarter highlights and our March outlook, in the fourth quarter we recorded a pretax profit of $170 million. Excluding the impact of Omicron disruptions, we estimate our profitability would have been approximately $250 million in the quarter. This was on revenue that was 74% recovered to 2019 levels, up 8 points from the September quarter. We started the quarter with lingering impacts of the prior variant, but encouraged by the significant improvement in demand in pricing that we saw throughout the quarter in each of our passenger segments.
Turning to the March outlook, we expect to incur pretax losses in the months of January and February, before returning to solid profitability in the month of March. The Omicron case surge is impacting business travel and international recovery the most, as meetings are canceled, planned office reopenings are postponed and countries put restrictions back in place.
On the consumer side, we're seeing some near-term hesitation in booking behavior, given the prominence of COVID in our daily lives and that combined with operational challenges that the industry is facing, consumers are delaying travel until case counts subside and the industry operational reliability is restored. So as a result, we're seeing the rate of recovery step down in the months of January and February to approximately 70% versus 2019 levels from nearly 80% where we were in December. And while the downturn in demand has been quick, we expect an equally rapid improvement once US case counts begin to decline. Remain confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel, both domestically and internationally.
We expect the month of March to return to the recovery trajectory that we were on in December, resulting in revenue recovery of 72% to 76% for the full quarter. Glen will talk in greater detail about the revenue environment and Dan will walk through our costs shortly. Based on our current outlook, we expect first quarter to be the only loss-making quarter for the year, and we're confident that we'll generate a meaningful profit for the full year of 2022 as the recovery resumes and accelerates in the spring and the summer.
Despite the challenges of the current environment, the multiyear recovery plan that we laid out last month in Capital Markets Day is unchanged. No one is better positioned than Delta to lead the recovery as business travelers return to the skies. Delta is also uniquely prepared to benefit from the reopening of international markets, which we are optimistic we'll start seeing this spring as restrictions lift.
Our three core priorities discussed last month remain unchanged. Fortifying our trusted consumer brand, restoring financial performance and foundation and building a better future for our people and our planet. As part of this, we remain firmly committed to our values and ESG goals, including our commitment to fighting climate change and moving forward towards a future of net zero aviation.
We recently announced the hiring of our new Chief Sustainability Officer, Pam Fletcher. The industry's only C-level CSO. Pam established an impressive track record as a senior leader at General Motors and has an extensive history of putting the customer first and developing products that help to enable a world free of emissions.
So as we move past the final phase of the pandemic, I'm confident that we'll continue our trajectory to not only emerge stronger than before, but to expand our lead in the industry and strengthen our position as the premium airline of choice in the years ahead. Our ambition to transcend the industry and create significant long-term value for all of our stakeholders. Everything we've done during this long crisis puts us closer to achieving that ambition.
Thank you, again. And with that, I'll turn the call over to Glen.
