Cheap fuel helped Delta set record profits
Delta Air Lines posted a historic third-quarter profit when it reported its earnings Wednesday, surpassing the airline industry’s record for quarterly results with $2.2 billion in pre-tax income.
A precipitous drop in fuel prices helped keep Delta’s operating margins at near all-time highs for the airline, growing five points year-over-year to 21%. Delta (DAL) saved $1.1 billion in fuel costs year-over-year last quarter. Those big savings combined with solid demand from travelers added up to a stellar quarter for the company. Earnings per share were up 45% year-over-year to $1.74 per share, surpassing the average analyst estimate of $1.71.
Delta CEO Richard Anderson said the strong performance is expected to continue through the end of the year. He forecast that earnings per share would be up 40% for the December quarter compared to a year earlier.
“The industry is arguably on its best footing ever post-deregulation,” Jamie Baker, a JPMorgan analyst, told USA Today.
Delta is close to hitting record profit margins at its hubs in Seattle, Los Angeles, New York, Minneapolis, Detroit, Cincinnati, Salt Lake City and Atlanta, Anderson said. The airline also recorded 100 days so far this year with zero mainline flight cancellations, an improvement over last year’s 95 days.