Delta Air Lines reports strong earnings growth for third quarter

Delta Air Lines reports strong earnings growth for third quarter

Delta Air Lines has reported adjusted pre-tax income of $1.6 billion for the September quarter.

Adjusted earnings per share were $1.80, at the high end of guidance and up 16 per cent compared to the prior year quarter.

The change was driven by revenue momentum, tax reform benefits and a four percent lower share count. 

The results also reflect a $30 million negative impact from Hurricane Florence.

“Our solid eight percent revenue growth, combined with flat non-fuel unit cost performance, helped offset 85 per cent of the $655 million fuel cost increase in the quarter.

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“These achievements are a testament to the strength of the Delta business model and the hard work of the Delta people, and I am pleased to recognize their performance with an additional $395 million toward 2018 profit sharing,” said Ed Bastian, Delta chief executive.

“Our commercial momentum and improved cost trajectory give us confidence that we are on a path to deliver continued top-line growth and expand margins as we move into 2019.”

Delta’s adjusted operating revenue of $11.8 billion for the September quarter improved eight percent, or $912 million versus the prior year.

This quarterly revenue result marks a record for the company, driven by improvements across Delta’s business, including a nearly 20 per cent increase in premium product ticket revenues and double-digit percentage increases in cargo, loyalty and maintenance, repair and overhaul revenue.

Total unit revenues excluding refinery sales increased 4.3 per cent during the period driven by strong demand and improving yields.

Foreign exchange benefit of approximately half a point was offset by the impact of Hurricane Florence.

“We generated record revenues in the September quarter on strong demand across the business and a favourable yield environment. 

“In the December quarter we expect total unit revenue growth of three to five percent, driving full year revenue growth to eight percent, the high end of our guidance,” said Glen Hauenstein, Delta president.

“The benefits of our brand, industry-leading network, and relentless focus on the customer are driving revenue growth, improving margins and accelerating the pace of our recapture of higher fuel costs.”