clearn.png
Wednesday July 15th, 2020 5:06AM

Delta profit surges and releases strong outlook

By The Associated Press

DALLAS (AP) — A new credit card deal and rising corporate travel boosted profit for Delta Air Lines in the first quarter, a trend it predicts will continue this spring.

Delta executives said Wednesday that corporate-account revenue is up 10% from this time last year, helping offset choppy demand from vacation travelers.

That was one of several factors that pushed Delta's first-quarter profit up by 31%, to $730 million.

Atlanta-based Delta has been leading its closest U.S. rivals — American Airlines and United Airlines — in financial measurements such as profit margin and operational ones like on-time flights and fewer cancellations. Delta executives say it helps them win corporate travelers.

On top of that, Delta cut a revamped credit card deal with American Express that Delta says will produce $500 million in additional revenue this year and even more in the future. AmEx will pay Delta up to $7 billion a year by 2023, compared with $3.4 billion last year — a better deal for the airline than analysts were expecting.

Delta gets an increasing share of revenue, now 55%, from premium fares and non-ticket sources such as the credit card deal and a growing aircraft-maintenance operation, which might partly insulate it from an economic slowdown.

Additionally, American, United and Southwest Airlines will cancel thousands of flights through early summer because regulators grounded their Boeing 737 Max planes after deadly crashes in Indonesia and Ethiopia. Delta doesn't own any Max jets and hasn't ordered any. Its shares have gained more than the others since the second crash last month.

Those canceled flights will cut into revenue at airlines that have the Max and will inconvenience passengers, but analysts think that by reducing flights they could unintentionally push fares higher.

Investors worry that airlines are adding too many seats and creating fare wars that hurt profits. Delta expects to increase passenger-carrying capacity by a relatively modest 4% to 5% in the second quarter, compared with a year ago.

Delta said first-quarter earnings excluding one-time items came to 96 cents per share, 6 cents better than the forecast of analysts surveyed by Zacks Investment Research.

Revenue rose 5% to $10.47 billion, beating the analysts' forecast of $10.39 billion. Costs excluding fuel dipped, while fuel expense rose 7%.

The airline forecast second-quarter earnings of $2.05 to $2.35 per share. The $2.20 midpoint is better than the $2.14 forecast of the Zacks analysts.

Delta Air Lines Inc. is the first U.S. carrier to report first-quarter results. Its shares rose 3.5% shortly after trading opened. They closed up 91 cents, or 1.6%, at $57.86.

___

David Koenig can be reached at http://twitter.com/airlinewriter

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Online - Georgia News, AP Online Headlines - Georgia News, AP Business - Economy, AP Business - Industries, AP Business - Financial Services
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Democrats prepare border bills, say Trump enflamed problem
Democrats critical of President Donald Trump's immigration policies are working on proposals to address the surge of families entering the U.S. at the southern border
7:07AM ( 16 minutes ago )
Barr to testify before the Senate as Mueller's report looms
Attorney General William Barr is making his way to Capitol Hill for a second straight day and is expected to be quizzed further about special counsel Robert Mueller's Russia report
6:48AM ( 35 minutes ago )
Prince Harry, Oprah work on mental health program for Apple
Kensington Palace says Britain's Prince Harry will be partnering with Oprah Winfrey to create a mental health series for Apple
6:48AM ( 36 minutes ago )
Associated Press (AP)
Turkey to look for alternatives if US doesn't deliver F-35s
Turkey's foreign minister says his country could look "elsewhere" if the U.S. does not deliver F-35 fighter jets
5:52AM ( 1 hour ago )
Before India's election, voters feed on false information
False news and hateful propaganda on digital platforms are at peak levels before India's elections begin, and that's posing a problem for officials trying to combat it
5:44AM ( 1 hour ago )
The Latest: UK, European firms appeal against no-deal Brexit
Groups representing manufacturers in the U.K. and across the continent have appealed to European leaders to work with Britain to avoid a divorce from the bloc without a deal.
5:37AM ( 1 hour ago )
AP Business
Dykstra sues Darling over book claiming racist tirade
Lenny Dykstra has sued former New York Mets teammate Ron Darling, St. Martin's Press and Macmillan Publishing Group over a passage in the pitcher's new book accusing the outfielder of directing racist comments toward Boston pitcher Oil Can Boyd
7:50PM ( 11 hours ago )
Levi's fiscal 1Q revenue up 7% in first post-IPO report.
Levi's 1Q revenue up 7% in first quarterly report since going public
5:46PM ( 13 hours ago )
Levi's swings to 1Q profit; revenue up nearly 7%
Levi's 1Q revenue up 7% in first quarterly report since going public
4:37PM ( 14 hours ago )
AP Business - Corporate News
Atlanta officer charged in wreck that led driver to lose arm
An Atlanta police officer has been indicted on charges including reckless driving in a wreck that caused another driver to lose an arm
8:57AM ( 2 months ago )
AP Online - Georgia News
AP Online Headlines - Georgia News
Asian shares mixed amid world tensions, worries about growth
Asian shares are mixed amid growing tensions between the U.S. and the European Union and a dim forecast on global economic growth
2:37AM ( 4 hours ago )
Asian shares fall amid global tensions, worries about growth
Asian shares are falling following a slide on Wall Street amid growing tensions between the U.S. and the European Union and a dim forecast on global economic growth
10:58PM ( 8 hours ago )
US stocks close lower, ending 8-day win streak for S&P 500
Industrial companies led a broad slide in stocks on Wall Street Tuesday, ending the benchmark S&P 500's eight-day winning streak
4:57PM ( 14 hours ago )
AP Business - Economy
Democrats prepare border bills, say Trump enflamed problem
Democrats critical of President Donald Trump's immigration policies are working on proposals to address the surge of families entering the U.S. at the southern border
7:07AM ( 16 minutes ago )
Barr to testify before the Senate as Mueller's report looms
Attorney General William Barr is making his way to Capitol Hill for a second straight day and is expected to be quizzed further about special counsel Robert Mueller's Russia report
6:48AM ( 35 minutes ago )
Prince Harry, Oprah work on mental health program for Apple
Kensington Palace says Britain's Prince Harry will be partnering with Oprah Winfrey to create a mental health series for Apple
6:48AM ( 36 minutes ago )
The Latest: May can't come to Brexit summit 'empty-handed'
The European Union's legislature has warned British Prime Minister Theresa May to come to the Brexit summit with clear indications on how she hopes to turn the cross-party talks with opposition leader Jeremy Corbyn into a success
6:45AM ( 38 minutes ago )
Bernie Sanders relaunches 'Medicare for All' amid 2020 glare
Sen. Bernie Sanders is set to unveil a new version of his "Medicare for All" plan, shaking up the 2020 presidential campaign by reopening the debate over his call to eliminate private health insurance
6:15AM ( 1 hour ago )