Delta posts $765M profit in 3Q
 

(This has been discussed a little in "Latest & Greatest...", but I thought it was worthwhile to have a stand-alone thread on this. Although short of analyst expectations of $0.94/share, $0.91/share is darn good given a 42% increase in fuel costs to the company. BTW, Delta is the largest user of jet fuel in the world, according to company executives.)

Delta's Profit, Sales Rise - WSJ.com


By SUSAN CAREY

Delta Air Lines Inc., lifted by strong revenue performance that helped offset a rising fuel bill, was profitable in the third quarter and expects to be in the black in the current quarter, the company said Tuesday

Stripping out a $216 million markdown in the value of its fuel hedges that settle in the future and a $31 million foreign-exchange loss, Delta earned $765 million, or 91 cents a share, in the latest quarter. That missed FastSet's estimate of 94 cents a share, but revenue exceeded expectations, rising 10% to $9.8 million, and the carrier's operating margin was 11%.

Shares of Delta were down 4.4% Tuesday in late morning trading on the New York Stock Exchange, trading at $8.51.

The Atlanta-based airline, the nation's second-largest by traffic after United Continental Holdings Inc., earned $549 million, or 65 cents a share, including the unusual items. A year ago, including $566 million in one-time items, Delta had a profit of $363 million, or 43 cents a share. Overall costs rose 13% to $8.9 billion, led by a 42% increase in its fuel tab.

Richard Anderson, Delta's chief executive, said the company encountered "strong demand, particularly from corporate customers," in the third quarter and expects that to continue in the current quarter. Delta's unit revenue, or the amount taken in for each passenger flown a mile, rose 11% in the third quarter, and was up 10% in October.

Ed Bastian, the president, said while growth in demand for flights across the Atlantic is slowing due to economic pressures in Europe, it still is growing. Over the past month, corporate bookings from the banking sector declined 4% from a year ago. But bookings from consulting and business-services clients, a much larger part of Delta's corporate business on transatlantic routes, rose 24% in the past month compared with a year earlier, he said. Meanwhile, revenue from bookings generated in Japan has recovered from pre-earthquake levels. U.S.-originating bookings to Japan still lag by 10% to 15% from levels seen before the quake and tsunami, positioning the airline for "a strong recovery" in Japan in 2012.

Delta said it is holding the line on capacity growth and working to wring other costs out of its operations, including retiring older aircraft, consolidating its facilities and reducing employee head count through voluntary departures. The company said it will slice its fourth-quarter capacity by 4% to 5% compared with the year-ago period, but also hopes to hold its unit costs to flat to up 2% compared with the year earlier.

For the fourth quarter, Delta expects to product an operating margin of 5% to 7%. For all of 2012, it foresees trimming capacity by 2% to 3% over the seats offered for all of this year. The company ended the quarter with $5.1 billion in cash.

Write to Susan Carey at [email protected]

time to ask the pilot union for some concessions!!! :confused:

Congrats Delta. One can only wonder what sort of profit (loss) Delta would have shown without subsidies provided by Alaska Airlines.

I know!! It's amazing!! Outsourcing to cheaper labor works!!

Congrats, beloved partner Alaska, on your record profit and record growth!!

Probably would have made more money. ;)

Um....excuse me, but last time I checked Alaska pilots were making a higher hourly wage than Delta pilots on the same piece of equipment. In fact, except for your two or three largest planes at Delta, Alaska pilots are outearning Delta pilots. Please explain the "cheaper" labor costs you referenced to me. I may have been born in a barn, but I wasn't born yesterday!

There is no money on the west coast. We desperately need the feed though, but we can't compete out there. No airline can. Remember when we bought feed out there and dismantled it? That proves its a dead zone market for all eternity. Only AK can compete, no other airline. Well and SWA with their significantly higher pilot costs and lower per pilot revenues. And VX, but we should ignore them until they build critical mass and then we can yield marketshare to them as well, perhaps in a code share. And UA as well but that's it. Well and JB. But that's really it. No other airline can make money on the west coast but if you allow us to outsource basically as many 737-900's as we want we will add a few wide body flights. Winning!

Its cheaper than having to compete. We get that you like this arrangement. But your scope is weaker than ours is and one day you will see what that means.*


*hopefully you will have fixed it by then but many pilot groups haven't been able to crack that code.

I'm not really sure peastain is Alaska btw.

Where is Pineapple guy, the accountant? I want him to tell me again why we shouldn't get big raises? Something about the RASM? How'd we do in Q3 when it came to RASM?

And the plot thickens...

Oh yeah?!! Well, our CEO makes more than yours, so there!!! Oh, wait....

And Alaska retirees make more than Delta retirees, no, wait, the Deltoids don't like to talk about that.:rolleyes:

As a reminder to all, go to "User CP", "Settings & Options", "Edit Ignore List" to add folks who post useless drivel...I just exercised it myself.

Airline Financials has data from CY2011Q1:

Airline Financial Data

It showed RASM for Delta & Alaska to be about the same, 12-13 cents revenue per available seat mile. Don't know about 3Q though.

so...record profits and they intend on shrinking.... amazing. I have flown four one ways on Delta in the past 5 weeks and all but one of those 8 flights was 95% full...the other was about 80%......hum...

4-5% for the winter. They want to avoid the traditional 4th Quarter loss. The summer 2012 block hour plan may be 1-2% smaller depending on the economy, but can change. SWA is doing something similar for next year due to the economy.

Ditto. Thanks for the refresher Elvis.

What did I tell you!;)

Alaska pilots wages are not better then Delta. Look at the 1st 4 years of FO pay on the 737 and see who's is higher. It's Delta. Alaska CA's make $177 to Delta's $174 on year 12. FO's are dead even at $119.

Please do some research before you post.

No, only if you're rude. Otherwise, have at it, and please post some interesting (accurate) facts or discussion topics that keep it germane & fun. We could all learn something from each other.

What do the #$@ $@#@ Germans got to do with it?:):D

Funny, because our NG rate is the same as yours.

congrats on the good results,profits are always welcome !!!

Bluto: Hey! What's this lying around sh!+?
Stork: Well, what the hell we s'posed to do, you moron?
D-Day: War's over, man. Wormer dropped the big one.
Bluto: Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!
Otter: Germans?
Boon: Forget it, he's rolling.

Did they have a conference call with the anal cyst today? If so, did anyone take notes?

With that comment and your screen name.. just... go... away....

ewwwwwww

What you talking 'bout T?? The procedure was done in one of Knoxville's finest medical clinics!

I have no dog in the Delta vs Alaska debate, however perhaps you should do some research:). According to MIT Alaska pilots average close to $8,000 per year more than Delta. Considering they don't have the wide body folks skewing the scale to the high end, I would say they do quite well. MIT link below:

http://web.mit.edu/airlinedata/www/2...0PERSONNEL.htm

Here is the transcript of the conference call.

Delta Air Lines CEO Discusses Q3 2011 Results - Earnings Call Transcript - Seeking Alpha

I see that Ed called the DC-9 an "inefficient regional aircraft". I surely hope he is not paving the way to replace any more of them with other regional aircraft, like the E175. Actually, he can, but they will be flown by pilots on OUR SENIORITY LIST!

That's just awesome, Ed did say:


So we fly regional jets. And DCI flies regional jets. We fly 738s, and we outsource 738s. We fly 777s and 744s, and we outsource 777s and 747s.



Like Bar said, Delta Air Lines is making great strides to quit being an airline and just being a ticket brokerage.



We have no core competency.

CNBC "American Greed" on TV right now about Marcus Schrenker taking millions from Delta pilots. Guy looks about 35.
Hard to believe this guy bilked hundreds of pilots. Anyone know the scoop?

News Headlines

He's in prison now I believe and broke

The transcript may be wrong. When I listened to the webcast this morning I swear I heard "dc-9 AND less efficient regional a/c."

Hoser, I bet you're right. That would make more sense in the context, and typically they lump those two together so we don't feel so bad when they park the 9s. Thanks.

Semi-related note but does anyone have handy the DC9 and MD90 operating costs?

I'm just wondering if an MD90 put on a DC9 route, segment by segment (not CASM) is the same cost or cheaper. IOW, even though the 90 has 30ish more seats than the 9, if the total cost to fly the same segment was the same or less on the 90, that would be added capacity (on a 1 for 1 basis) that wouldn't saturate the bottom line as we could always cap the fare buckets to match the 9 and only sell the extra seats in the 90 at the highest bucket only during peak times and/or irop relief.

I think that's the plan with the 90 although it may not be the 90 doing the route but the 88 which is 20 or so seats off of the DC95.

Their hourly rates are lower, so they're either flying more days per month or have better rigs. Point was their hourly rates are lower.

He actually states the average pilot salary at SW is 166,000 per year which is a correct number.