Delta CEO expects Q4 profit on strong holiday bookings very strong

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• Delta Air Lines CEO Ed Bastian reported Thursday that the company is on track for a "great Christmas," a fact that will help it score its second consecutive profitable quarter in Q4.
• "We've had a really strong close to the year. The holiday bookings, particularly for Christmas and the New Year's holiday, are coming in very, very strong," the head of Delta (NYSE:DAL) told CNBC.
• Earlier in the day, Delta (DAL) set its 2022 targets at an investor event. The company predicted "meaningful profitability" in 2022. Longer-term, DAL predicted revenue of more than $50B in 2024.
• Comparing to 2019, Bastian said the company's capacity still lags behind pre-pandemic levels, as it works to build back its flight schedule. That said, the Delta CEO reported that its unit revenue to be up "a not insignificant" amount in the next two weeks compared to a 2019 benchmark.
• He called this level of demand "encouraging" as it heads into 2022.
• Bastian identified "scale inefficiency" as its biggest current profitability headwind, arguing that as the company adds back capacity, it will get more efficient and improve margins.
• "Right now, we're only flying roughly, for next year, about 90% of our [capacity] but we own 100% of the cost," he explained. "As we bring the airline back up, we'll get some good scale out of that."
• Bastian also pointed to labor and fuel costs as potential "pressure points."
• Even with its rosy forecast, DAL was little changed in Thursday's intraday action. The stock rose three cents to $36.64 at about 10:45 a.m. ET.
• Shares reached a 52-week low of $33.40 early this month.
• Comparing DAL to competitors like United (NASDAQ:UAL), American (NASDAQ:AAL) and Southwest (NYSE:LUV), the major air carriers have dramatically underperformed the overall market during the past year.
• The sector showed strength during the first half of the year amid hope that the pandemic might be passing. However, setbacks like the Delta variant and rising fuel costs have weighed on airlines in the past couple months.
• AAL has held up better than most of its peers, coming in basically flat over the past 12 months. Meanwhile, DAL, UAL and LUV have all posted declines of more than 12%: