Delta Air Lines Inc. says the rapidly spreading omicron coronavirus variant will delay a recovery in travel by 60 days and contribute to a first-quarter loss but won’t derail the carrier’s expectation to remain profitable for the rest of the year.

With Covid cases expected to peak in the U.S. in the next seven days, the pace of improvement in travel should resume its original December trajectory in the second half of February, Delta said in a statement Thursday in which it disclosed fourth-quarter financial results.

“We still see our President’s Day and beyond booking patterns to be very healthy,” Chief Executive Officer Ed Bastian said in an interview. “People are ready to go, ready to travel.”

While the Atlanta-based carrier projected pretax losses in January and February, it expects to record a profit in March and report meaningful earnings for the final three quarters and full year.

Delta is the first major U.S. airline to report financial results for a quarter battered by nearly 11,000 flight cancellations in the last 13 days of December and more than 13,200 in October, according to data tracker But widely varying employee sick rates among carriers, which continue to ground some flights, may mean Delta’s results aren’t the industry bellwether that they typically are. 

Delta rose 2% before the start of regular trading in New York. The stock had dropped less than 1% for the 12 months through Wednesday, while the S&P 500 advanced 24%.

About 8,000 Delta employees have caught the virus over the past four weeks, Bastian said. At its peak in late December and early January, the virus and winter storms forced the airline to cancel as much as 10% of its scheduled daily flights. That shaved about $75 million from fourth-quarter revenue and trimmed pretax profit to $170 million from the company’s earlier expectation of $200 million to $250 million.

Delta’s adjusted fourth-quarter profit of 22 cents a share was a penny short of the average of analyst estimates compiled by Bloomberg. Adjusted net income of $143 million gave Delta a second straight quarterly profit after excluding U.S. financial aid. Revenue, excluding refinery operations, was $8.43 billion, compared with expectations for $8.45 billion. 

Traveler Volume

Revenue recovered to 74% of the pre-pandemic level in the same period of 2019, although international passenger revenue remains at 50% amid ongoing travel restrictions in some nations. Fourth-quarter domestic business traveler volume was near 60% of the 2019 level. 

“If omicron does recede as rapidly as medical experts are thinking, I’d expect offices will be reopening in the spring and we’ll see business traffic increase from there,” Bastian said. 

Delta expects revenue this quarter to be 72% to 76% of the 2019 level. Unit costs, an industry gauge of efficiency, will be 15% above two years ago, excluding fuel and special items. The impact of omicron and flight disruptions will account for three points of the change. Flying capacity will be as much as 85% of first quarter 2019 levels. 

Delta also announced a special profit-sharing payment of $1,250 per employee set for Feb. 14. The carrier will hand out about $100 million in total, or about 20% of a profit earned in the first half of 2021. Delta’s profit-sharing payments peaked at $1.6 billion for 2019.