Delta Air Lines has reported financial results for the December quarter 2017, revealing an adjusted pre-tax income for the period of $1 billion.
The figure comes despite a $60 million impact from the combination of December’s power outage at Atlanta’s Hartsfield-Jackson Airport and storm Benji.
For the full year, adjusted pre-tax income was $5.5 billion, a $621 million decrease relative to 2016.
“Delta people rose to the challenges of 2017 to produce solid financial results, industry leading operational reliability and strong improvements in customer satisfaction, and it’s an honour to recognise their achievements with $1.1 billion in profit sharing,” said Ed Bastian, Delta chief executive officer.
“Looking ahead to 2018, we expect to drive solid earnings growth by growing our top line four to six per cent, improving our cost trajectory and integrating our international partner network.
“As a result, we are able to increase our previous full-year guidance to $6.35 to $6.70 per share due to additional benefits from tax reform.”
Delta’s operating revenue of $10.2 billion for the December quarter was up 8.3 per cent, or $787 million versus prior year.
Total unit revenues excluding refinery sales increased 4.4 per cent for the December quarter.
Passenger revenue increased $527 million, including $200 million from Delta’s Branded Fares initiatives.
Passenger unit revenues increased 4.2 per cent, including 0.5 points from one-time revenue adjustments, on 2.3 per cent higher capacity.
Cargo revenue increased 14.4 per cent, driven by higher volumes and yields.
Other revenue improved 17.9 per cent primarily due to higher loyalty revenue and a $150 million increase in third-party refinery sales.
For the full year, Delta’s operating revenue of $41.2 billion was up four per cent, or $1.6 billion versus prior year.
Total unit revenues excluding refinery sales increased 2.4 per cent on one per cent higher capacity.
“We enter 2018 with significant momentum and every entity delivering positive passenger unit revenue for the first time in five years, driven by a robust demand environment and improving business fares,” said Glen Hauenstein, Delta president.
“We expect to deliver total unit revenue growth of 2.5 to 4.5 per cent in the March quarter and leverage our unrivalled domestic network, international partnerships, and solid pipeline of commercial initiatives to deliver similar performance each quarter throughout 2018.”
As a result of the tax cuts and jobs act of 2017, Delta recognised a one-time charge of $150 million in the December quarter from the estimated impact of the inclusion of foreign earnings and revaluation of deferred tax assets and liabilities.
This one-time charge is being excluded from Delta’s results as a special item.
For 2018, Delta expects the reduction in the corporate tax rate will result in an all-in book tax rate for the company of 22-24 per cent.