Lower jet fuel prices boosted Delta Air Lines second-quarter profits, the Atlanta-based carrier said Wednesday.
The airline reported $1.48 billion in net income for the quarter, up 85 percent from the same period last year. Revenues, however, were only up 1 percent to $10.7 billion.
“Delta’s record results have allowed the company to invest in its employees through higher wage rates and profit sharing; improve the experience for our customers through new aircraft and innovative partnerships with global carriers; and uniquely deliver value for our shareholders by accelerating our capital returns while also paying down debt,” said Delta’s chief executive Richard Anderson in a statement.
The carrier said that its fuel expenses were $463 million lower than in the second quarter of 2014. It also offset $600 million in settled hedge losses. For the rest of 2015, Delta said it expects to pay $1.90 to $2.00 a gallon for fuel, significantly lower than the $2.65 a gallon it has paid in the first half of the year.
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Excluding one-time accounting items, Delta said it had net income of $1 billion, or $1.27 per share, beating Wall Street analysts’ estimates of $1.22 per share.
Shares of Delta [ticker: DAL] rose 33 cents to close at $43.99 on Tuesday.
Delta also told investors that it expects unit revenues to be down 4.5 to 6.5 percent as its capacity will be up three percent in the third quarter. However, capacity will be flat in the fourth quarter, the airline said.
“Management is aware of the revenue environment and seems to be taking actions to adjust capacity growth to demand growth,” Cowen and Company analyst Helane Becker wrote in an investor note.
Delta is one of several U.S. carriers that is under investigation by the U.S. Department of Justice for possible collusion on capacity in order to keep airfares high.
Anderson said he was disappointed by the recent contract vote where 65 percent of pilots voted against a tentative agreement.
“This outcome doesn’t mark any change to the strong working relationship we have with our pilots,” Anderson said. “We will continue to work together with them to find common solutions.”
Andrea Ahles, 817-390-7631