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Delta reported full-year 2018 revenue and earnings Tuesday morning, which were mostly in line with analyst estimates. However, the airline is warning investors about slowing growth in first-quarter 2019 as the government shutdown is hitting the airline’s bottom line.

From October to December 2018, Delta reported more than $10.7 billion in revenue and $1.3 billion in pre-tax earnings. For the full year, Delta collected $44.4 billion in revenue, with just shy of $40 billion of that coming from passenger service — and it made $5.15 billion in pre-tax profit.

Although that revenue number is up 8% from last year, the airline’s pre-tax profits fell 6% from 2017 due to a jump in fuel prices. The airline’s total fuel costs increased more than $2.2 billion, which was more than half of the $4 billion increase in operating costs. In its press release, Delta claims “the company overcame approximately 90%” of the increase in fuel expenses through higher fares.”

Delta reported revenue, yield and capacity increases across almost all regions. The only region that experienced a dip in unit revenue was the transpacific market. While Delta didn’t go into details on the drop in its press release, it’s likely that the ongoing trade tensions between the US and China are stunting the airline’s growth plans for the region.

SkyMiles collectors may be interested to learn that Delta’s award travel revenue jumped 10% year-over-year — indicating a similar jump in award ticket redemptions. In addition, Delta’s non-award ticket loyalty program revenue jumped 15%. Combining the two, Delta reported $4.1 billion in revenue in 2018 directly from its loyalty program, accounting for almost 10% of total revenue.

However, it’s the airline’s warning about slowing growth in 2019 that’s capturing mainstream headlines. Delta’s CEO Ed Bastian went onto CNBC’s Squawk Box Tuesday morning to talk about the shutdown’s impact on the airline. He says that Delta is “stepping in, providing a lot of people” to “help take any of the non-security functions off of the TSA’s hands.”

Most of the sting of the shutdown seems to be on the revenue side. Delta’s CEO estimates that the airline is losing about $25 million in revenue in January since government contractors and officials aren’t traveling as normal. And as other airlines have experienced, Delta is also having certification issues bringing new aircraft into its fleet.

While Bastian didn’t mention it specifically, it’s believed that the shutdown could cause a delay to Delta’s scheduled introduction of the Airbus A220 later this month. A Delta spokesperson recently confirmed to TPG that the airline is working “with the FAA to ensure that the A220 is fully certified when it enters our fleet. No customer disruption or impact to schedules are expected.”

Featured image by Robert Alexander/Getty Images

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