Delta Air Lines has reported financial results for the September 2015 quarter, including adjusted net income of $1.4 billion or $1.74 per diluted share, up 45 per cent from the September quarter of 2014.
“Despite currency volatility and global economic uncertainty which drove a modest decline in revenues, we expanded operating margins by over five points to 21 per cent, grew earnings per share by 45 per cent, and generated $1.4 billion of free cash flow in the September quarter as demand remains solid and fuel prices have dropped materially.
“We expect that strong performance to continue in the December quarter with operating margins of 16 to 18 per cent and over 40 per cent earnings per share growth,” said Richard Anderson, Delta chief executive.
“It’s an honour to recognise the hard work of 80,000 outstanding Delta employees with over $1 billion of profit sharing accrued so far this year.
“Our team consistently delivers best-in-class operations and service to our customers, develops innovative solutions with our global partners, and produces strong returns for our shareholders.”
Delta’s operating revenue for the September quarter decreased 0.6 per cent, or $71 million, including $235 million in foreign currency pressures.
Passenger unit revenues declined 4.9 per cent, which includes approximately 2.5 points of impact from foreign currency.
Delta continues to successfully implement its Branded Fares initiative, increasing paid first class load factor by eight points to 56 per cent and expanding its Basic Economy product to over 450 markets.
In total, Branded Fares products produced more than $75 million in incremental revenue in the September quarter.
“Our commercial initiatives are delivering solid benefits as we’ve expanded our revenue premium to the industry, strengthened our hubs in New York, Seattle and Los Angeles, and deepened our partnerships around the globe.
“However, low fuel prices and foreign currency have pressured our revenue performance,” said Ed Bastian, Delta president.
“By keeping our system capacity flat for the December quarter, we are taking action to drive improvement in our unit revenues which we forecast will decline 2.5-4.5 per cent for the quarter including 2 points of impact from foreign currency.
“Our conservative growth in this low fuel environment is evidence of our commitment to getting RASM back on a positive trajectory, which is a key component to achieving our long-term margin targets.”