ATP Grads at Airlines

Delta Posts $467M Profit in 2nd Quarter

Published Jul 19, 2010 on Pilot Jobs

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Delta Air Lines Inc. reported its largest quarterly profit in a decade on Monday.


The world's largest airline said its second-quarter net income was $467 million, or 55 cents per share. That reversed a year-ago loss of $257 million, or 31 cents a share, when the airline industry was still reeling from the recession. Chief Executive Richard Anderson described the revenue environment as "good, but not yet great."

Delta said it expects to be solidly profitable for the year. And it doesn't expect to increase capacity much this year or in 2011, signs of a cautious approach with the strength of the U.S. economic recovery in question.

Still, the airline, based in Atlanta, is in much better shape than it was just a year ago.

"The business is performing well and we still have significant opportunity for improvement ahead," Anderson said during a conference call with analysts and reporters.

Delta expects to report double-digit year-over-year unit revenue gains for the September quarter.

Several major carriers are expected to post profits in the days ahead. Continued fare sales are good for consumers, but not for investors who want airlines to charge more for tickets while remaining lean.

Analysts say that while airlines have raised ticket prices since the recession ended, they still have room to grow.

The parent of United Airlines will report its results on Tuesday, followed by US Airways Group Inc. and the parents of American Airlines and AirTran Airways on Wednesday and Continental Airlines Inc., Alaska Air Group Inc. and JetBlue Airways Corp. on Thursday. Southwest Airlines Co. reports its second-quarter results on July 29.

In the latest quarter, Delta's passenger unit revenue increased 19.4 percent, driven by higher yields and occupancy. Cargo revenue increased 22 percent. Passenger unit revenue is calculated by dividing passenger revenue by available seat miles, which are the available seats an airline offers times the miles flown. Passenger yield is the measure of the average fare paid per mile, per passenger, which is calculated by dividing passenger revenue by revenue passenger miles.

Delta said its latest results included $90 million in profit sharing expense.

The last time Delta reported a quarterly profit close to what it reported in the latest quarter was in the second quarter of 2000, when it posted net income of $376 million. Today, however, Delta is a much larger airline, having gobbled up Northwest Airlines in 2008.

The total number of international passengers rose 6 percent in the first five months of the year, according to the International Air Transport Association. Traffic at the front of the plane -- the most expensive seats in business and first class -- improved at an even faster clip.

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