Posted: Wednesday, July 24th 2013 at 8:53am
Delta posts 2Q profit on lower fuel spending
By The Associated Press
ATLANTA (AP) -- Delta is spending less on fuel these days, and that's helping the airline make money even though passengers aren't doing much more flying.
Delta Air Lines Inc. said Wednesday that net income in the second quarter was $685 million, or 80 cents per share. That compares with a $168 million loss a year earlier, when the world's second-biggest airline was weighed down by accounting losses tied to bets on fuel prices.
The Atlanta-based company said that excluding special items, it would have earned 98 cents per share, which beat analysts' forecast of 95 cents per share.
Delta is beefing up its presence in New York, including buying 49 percent of Virgin Atlantic airlines to bolster its position on the New York-London route. Last week, Delta said that it planned to hire 300 more pilots starting in November.
The airline recently announced that it would begin paying a quarterly dividend in September, and it authorized a $500 million program to buy back stock to make remaining shares more valuable.
Second-quarter revenue was about flat at $9.71 billion - $300 million less than analysts expected, according to a survey by FactSet - as traffic rose only 0.5 percent.
Delta increased passenger-carrying capacity less than 1 percent, and 84.8 percent of seats were filled on the average flight. While that was slightly below the year-ago figure of 85.1 percent, it was still very high by historical standards.
Delta's fuel bill was $2.6 billion, or $710 million less than a year ago, when it took a $561 million fuel-hedging loss. Excluding the 2012 hedging loss, Delta still spent $288 million less on fuel. Costs other than fuel rose 2.5 percent, less than Delta originally forecast. Overall, operating costs declined 8 percent.
The company ended the quarter on June 30 with 908 aircraft, including 181 smaller planes used by regional affiliates, and nearly 80,000 employees.
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