Delta, struggling with Omicron and storms, posts a fourth-quarter loss.
The airline said it lost $408 million in the final three months of 2021, but added that performance was expected to recover with a strong spring and summer travel season.
A Delta jet parked at Hartsfield-Jackson International Airport in Atlanta.Credit…Charlie Riedel/Associated Press
Delta Air Lines said on Thursday that it lost $408 million in the final three months of last year, as the Omicron variant of the coronavirus interfered with holiday operations and pushed back the airline’s recovery.
“While the rapidly spreading Omicron variant has significantly impacted staffing levels and disrupted travel across the industry, Delta’s operation has stabilized over the last week and returned to preholiday performance,” Delta’s chief executive, Ed Bastian, said in a statement. “We are confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel.”
A mix of bad storms and staff calling out sick forced airlines to cancel tens of thousands of flights over the busy holiday travel period. Delta alone scrubbed more than 2,000 flights over the two weeks starting on Christmas Day, the fourth most flight cancellations among U.S. airlines.
Mr. Bastian said on CNBC on Thursday morning that about 8,000 employees had called out sick over the past four weeks, representing more than 10 percent of its work force. United Airlines said this week that about 3,000 employees, more than 4 percent of its staff, recently tested positive for the virus. Almost all employees at both airlines are vaccinated.
Shortly before Christmas, Delta warned the Centers for Disease Control and Prevention that the virus could disrupt holiday travel and asked the agency to shorten its recommended isolation time for people who test positive for the virus. That wish was granted days later, setting off a feud with one of the nation’s most prominent airline labor unions, which said that shortened isolation periods put workers and travelers at risk.
Airlines finally recovered from their holiday disarray this week, but Omicron is expected to weigh on travel in the coming months, Delta’s president, Glen Hauenstein, said in the statement.
“The recent rise in Covid cases associated with the Omicron variant is expected to impact the pace of demand recovery early in the quarter, with recovery momentum resuming from Presidents’ Day weekend forward,” he said.
The airline expects revenue over the first quarter to be about 72 to 76 percent of the level it was in a similar period in 2019, compared with 74 percent in the final quarter of last year. The airline said it eked out a small $208 million profit over all of 2021, thanks to about $4.5 billion in federal relief to pay workers. Delta lost more than $12 billion in 2020 and had a profit of about $4.8 billion the year before.
Delta is the first major airline to report its fourth-quarter financial results. American Airlines and United are expected to announce next week, followed by Southwest Airlines the week after.
As natural gas prices in Europe continue to hit record highs, utility companies in Germany are scrambling to secure millions of euros in extra liquidity to ensure they can meet future contracts.
Steag, Germany’s fifth-largest utility, said on Wednesday that it had organized financing in the “low triple-digit-million euro” range through an investing partner.
“We needed to gain more liquidity to secure future contracts,” said Daniel M?hlenfeld, a spokesman. He stressed that the financing was not a credit from a bank, but had been organized through another business partner. Steag operates several coal- and gas-burning power plants in western Germany, and generates power from renewable sources including wind, biomass and geothermal.
Last week, another leading German utility, Uniper, announced that high energy prices had forced it to seek extra credit worth 10 billion euros ($11.4 billion). Most of the money, EUR8 billion, came from Uniper’s parent company, Fortum, based in Finland. The rest is from Germany’s state-owned development bank, KfW, and was secured as a backup to mitigate future price swings, the company said.
Other German energy companies, including RWE and EnBW, said that they had taken similar steps to ensure they had sufficient credit to weather the volatility in the European energy market, but declined to give details. They all face the same challenge of needing to hedge their sales of gas and electricity to cover price differences across different markets.
In a statement explaining the decision to provide Uniper with extra financing, Fortum said that European gas prices reached “unprecedented levels” in December. In Germany, the price for energy to heat and power homes in November rose more than 101 percent from a year earlier, the country’s official statistics office, Destatis, said.
In Britain, the sudden price rise has led to the collapse of several smaller energy suppliers.
Global demand for energy jumped last year, after the world economy reawakened from widespread shutdowns aimed at slowing the spread of the coronavirus pandemic. When many economies started up again last spring, the need for natural gas shot up. Natural gas is crucial for generating electricity, running factories and heating homes across the continent.
European countries normally stock up on gas in the summer, when prices are relatively cheap, but the pandemic and a cold winter last year drew down levels of stored gas, leading to the wild swings in prices.
Prices for natural gas have risen about sixfold, to record levels. The surge means the wholesale price of electricity has reached stratospheric levels, making headlines across Europe as consumers, battered by the pandemic, are now hit by big increases in their home energy bills. Many European countries have tried to buffer the shock to consumers with price caps, subsidies and direct payments.
These high costs are also undermining the economics of companies that make fertilizer, steel, glass and other materials that require a lot of electricity.
Ms. Holmes, who was found guilty on three counts of wire fraud and one count of conspiracy to commit wire fraud, faces a maximum sentence of 20 years in prison for each count. She is expected to appeal the verdict, and the court ordered any “post-trial motions” to be filed by March 4.
The length of time before the sentencing will allow prosecutors to handle a trial against Ms. Holmes’s alleged co-conspirator, Ramesh Balwani, an earlier court filing said. Mr. Balwani, also known as Sunny, was the chief operating officer of Theranos, the start-up that Ms. Holmes founded in 2003 and that she claimed would revolutionize health care with highly advanced blood tests. The blood tests ultimately did not work as advertised.
The U.S. government also said in a filing on Tuesday that it would dismiss three of its fraud charges against Ms. Holmes after a jury failed to reach a verdict on them.
Ms. Holmes, 37, was found guilty of lying to investors about Theranos’s abilities so she could raise money for the company. Jurors acquitted her on four fraud charges related to patients who took Theranos’s blood tests. They deadlocked on three additional counts related to investments in the company.
Judge Edward J. Davila, who is overseeing the federal case in California’s Northern District, has significant discretion in sentencing Ms. Holmes. Her convictions were tied to more than $140 million in investments in Theranos, and the high dollar amount could be a factor in her sentencing, as could the message the verdict sends to others in Silicon Valley.
Judge Davila is also overseeing the trial of Mr. Balwani, who was indicted alongside Ms. Holmes on identical charges in 2018. The pair, who were business and romantic partners, had their cases severed after Ms. Holmes accused Mr. Balwani of emotional and sexual abuse. He has pleaded not guilty to fraud and has denied the abuse accusations.
Mr. Balwani’s trial has been delayed by surging coronavirus cases in the Bay Area, where the case is being heard. Jury selection is set to begin on March 9.
Until September, Ms. Holmes remains free on a $500,000 bond secured by property. During the trial, she reportedly lived on a 74-acre estate in Woodside, Calif., a wealthy Silicon Valley town, with her partner, Billy Evans, and their baby son.
Lael Brainard, a Federal Reserve governor whom President Biden has nominated to be the central bank’s new vice chair, plans to tell lawmakers that the central bank will use its policies to wrestle inflation under control when she testifies at her confirmation hearing.
Ms. Brainard, who will face vetting before the Senate Banking Committee at 10 a.m. on Thursday, is likely to garner considerable support among Democrats and may pick up some Republican votes, though how many are unclear at this point.
Her nomination — and her new role at the Fed if the Senate confirms her — comes at a challenging economic moment. While unemployment is falling rapidly, inflation has taken off, with a report on Wednesday showing that a key price index rose in December at the fastest pace since 1982.
“We are seeing the strongest rebound in growth and decline in unemployment of any recovery in the past five decades,” Ms. Brainard will say, according to her prepared remarks. “But inflation is too high, and working people around the country are concerned about how far their paychecks will go.”
Ms. Brainard will also tell lawmakers that the Fed’s policies are “focused on getting inflation back down to 2 percent while sustaining a recovery that includes everyone,” calling that the central bank’s “most important task.”
After nearly two years of propping up a virus-stricken economy by keeping interest rates at rock bottom and buying government-backed debt, Fed officials began to slow their large bond purchases late last year. That program is on track to end in March. Officials have signaled in recent weeks that they also expect to lift interest rates to make borrowing more expensive, slowing demand and helping to cool the economy.
Markets increasingly expect four rate increases in 2022, which would put the Fed’s short-term policy interest rate just above 1 percent.
“Today the economy is making welcome progress, but the pandemic continues to pose challenges,” Ms. Brainard will say. “Our priority is to protect the gains we have made and support a full recovery.”
Ms. Brainard has been at the Fed since 2014, spanning the Obama, Trump and Biden administrations. Before that, she was a top international official at the Treasury Department. An economist and a Democrat, she had been seen as a potential contender to be Treasury secretary or Fed chair during the Biden administration.
She has a good working relationship with Jerome H. Powell, the Fed chair, whom Mr. Biden has renominated for a second term. She will use her prepared statement to emphasize that she has worked for many administrations in Washington — Democrats and Republicans alike — while pledging to take the Fed’s mission to fight inflation and its independence from partisan wrangling seriously.
“I will bring a considered and independent voice to our deliberations,” she will say.
As the Omicron variant of the coronavirus surges across the country, tests are in short supply. But for a select group of employees at corporate America’s largest firms, tests are free and often readily available.
These companies have been buying tests in bulk, some as part of their return-to-office protocols and others as a perk to offer workers peace of mind — even for those not yet coming into the office, Emma Goldberg, Lauren Hirsch and David McCabe report for The New York Times.
Unlike other company perks, like free snacks, virus tests are a vital public health tool. Some large corporations are sending out free weekly shipments to employees, while other small businesses, like restaurants, are struggling to safely stay open.
The federal government has been slow to authorize rapid antigen tests, because it has held them to a high standard for medical devices. Other places, like Britain, were quicker to approve rapid tests as a public health tool, leading to faster production.
The result is a testing shortage, and a decentralized system in which schools, hospitals and companies are competing to get tests. “It doesn’t surprise me that many organizations who were recognizing they need these tests to stay in business were buying them,” said Joseph Allen, an associate professor at Harvard. “A smart testing strategy would have flooded the market with these, so they don’t have to be hoarded.”
With testing kits scarce, some health experts are questioning the distribution of tests. “There’s a few better targets than at-home white-collar workers,” said Dr. Benjamin Mazer, a pathologist in Connecticut specializing in laboratory medicine.