• Delta's Air Cargo Business Booms, Supreme Court Curtails Vaccine Mandate, Wholesale Inflation Slows

    Delta's Air Cargo Business Booms

    Delta Air Lines struggled with maintaining consistent passenger travel because of the coronavirus in 2021 but its air cargo business boomed with products moving between warehouses by plane.

    Air cargo revenue rose 37% in 2021 to cross $1 billion. In the fourth quarter, which encompassed the holiday season, revenue increased to $308 million from $187 million in 2019.

    Cargo is a small part of the airline's business compared to passenger travel. But the big rise in business illustrates how companies looking to move products used airlines during highly challenged supply chain issues.

    For the year, passenger revenue was 47% lower at $22.5 billion. Net income for the year was $280 million, nearly $4.5 billion lower than in 2019.

    Surges of new coronavirus cases during the year weighed on air travel. Delta executives said on an earnings call with investors Thursday that the major rise in cases of omicron coronavirus variant hit travel and future bookings in late December, more so than previous increases in cases.

    Domestic business travel, however, improved through the year to reach about 60% of 2019 levels. Glen Hauenstein, Delta’s president, told investors that “when we get to spring and summer, that we'll see a robust demand for business travel as people get back into the regular routine and feel safe traveling.”

    Supreme Court Curtails Vaccine Mandate

    In a blow to the Biden administration, the Supreme Court struck down a government rule to require large companies to mandate employees get vaccinated or tested weekly if they choose not to get the shot.

    But the court held the mandate in place for healthcare workers at medical facilities that receive federal funds through Medicaid and Medicare.

    The Occupational Safety and Health Administration had created the rule that would have covered some 80 million employees at companies employing more than 100 people. The court ruled that while the coronavirus didn’t pose an occupational hazard, effectively saying that the virus amounted to a daily hazard that OSHA isn’t permitted to regulate.

    Businesses and the attorneys general of 27 Republican-led states had sued to stop the mandate with mixed results in lower courts.

    While the rule for companies is halted, many businesses still are mandating that employees be vaccinated to keep their jobs. Financial company Citigroup, for example, told unvaccinated employees last week that they had until Jan. 14 to get vaccinated or be placed on unpaid leave and fired by the end of the month if they didn’t comply.

    Wholesale Inflation Slows

    The Labor Department reported Thursday that wholesale prices producers pay settled at an annual rate of 9.7% in December.

    December’s reading was 0.1 percentage point lower than in November. Excluding the volatile food and energy prices, the so-called core inflation was 6.9% for the year, matching November.

    The report showed signs that inflation may be starting to slow. Food prices dropped 0.6% following a 1.2% increase in November. A 3.3% drop in energy prices overcame a 2% rise in November.

    In addition to its producer prices report, the Labor Department reported Thursday that 230,000 new claims for unemployment were filed last week, a 23,000 increase from the previous week.

    Taking out seasonal adjustments, or what’s considered the raw number, there were 419,446 new claims. That’s 103,693 higher than the previous week.

    Source: www.CoStar.com