Delta reports increase in profit for June quarter

Delta Air Lines has reported its latest financial results, including adjusted pre-tax income for the June 2016 quarter at $1.7 billion.

This represents a $42 million increase over the June 2015 quarter. 

Adjusted net income for the period was $1.1 billion or $1.47 per diluted share.

“The Delta people again delivered another quarter of solid profitability, superior operational performance and great customer service, continuing to strengthen our brand and our foundation for the future,” said Ed Bastian, Delta chief executive officer. 

“As we look to the remainder of the year, the large year-on-year savings driven by lower fuel are largely behind us and it is important to achieving our long-term financial targets that we get unit revenues back to a positive trajectory.”

Delta’s operating revenue for the June quarter decreased two per cent, or $260 million, of which $65 million was due to foreign currency pressures. 

Passenger unit revenues declined 4.9 per cent, including one point of impact from foreign currency, on a 3.2 per cent increase in capacity. 

With the additional foreign currency pressure from the steep drop in the British pound and the economic uncertainty from Brexit, Delta has decided to reduce six points of US-UK capacity from its winter schedule. 

These changes, in combination with other network actions, will reduce system capacity by approximately one point in the December 2016 quarter and the company now expects to grow its system capacity by one percent year over year during this period.

“While the revenue environment remains challenging, with persistent headwinds from close-in domestic yields and geopolitical uncertainty, we remain focused on achieving our goal of positive unit revenues by year end,” said Glen Hauenstein, Delta president.

“We’ll continue to move quickly and aggressively with all our commercial levers, including an incremental one point reduction in our December quarter capacity levels, to make sure we create the momentum we need to achieve this goal.”