Delta Earnings Soar on International Flights
Delta Air Lines, which emerged from bankruptcy at the end of April, posted higher-than-expected quarterly profit Tuesday, boosted by international flying.
The earnings from Delta, the first major U.S. carrier to report on its third-quarter performance, gave an indication that the industry's recovery from a long slump is still intact despite soaring fuel prices and signs that U.S. economy is slowing.
The No. 3 U.S. carrier by passenger traffic said net profit rose to $220 million, or 56 cents per share, compared with $52 million in the same period a year ago, when the company's shares were unlisted.
The earnings beat Wall Street expectations of 41 cents per share, according to Reuters Estimates.
The figures are the first for Delta with Richard Anderson as chief executive. Anderson, who was previously CEO at Northwest Airlines, took over the top job at Delta in September, replacing Gerald Grinstein, who retired.
Operating revenue rose 10 percent to $5.2 billion, boosted by strong growth on routes to Latin America and across the Atlantic.
The revenue growth well outpaced a 4 percent rise in operating costs, while interest expenses dropped 41 percent as the company paid off $1 billion in debt in the quarter.
Revenue per available seat mile, or unit revenue, rose 12.6 percent to Latin America and 8.5 percent across the Atlantic.
Domestic U.S. unit revenue rose 6.3 percent.
Delta, like many other U.S. network carriers, is shifting capacity to lucrative international routes and away from the hard-fought domestic market.
Delta plans to continue the trend in the fourth quarter. The airline said it will pull 13 planes from its domestic fleet.
The company forecast a decline in mainline domestic capacity, as measured by available seat miles, by 1 percent to 3 percent in the fourth quarter. It plans to increase international capacity by 12 percent to 14 percent.
Since listing its new, post-bankruptcy shares on the New York Stock Exchange in May, Delta stock has fallen about 8 percent.