Delta 3Q Profit Down 4%/How are we gonna do?
10-14-2016, 06:46 AM
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Delta 3Q Profit Down 4%/How are we gonna do?
Came across this article with my morning coffee. When do we post our 3rd quarter results? Here's hoping........
Delta 3Q net profit down 4%; caps capacity growth at 1% through 2017
Aaron Karp
Oct 13, 2016
Delta Air Lines A330-300
Delta Air Lines A330-300
Rob Finlayson
Delta Air Lines reported a third-quarter 2016 net profit of $1.26 billion, down 4% from net income of $1.32 billion in the 2015 September quarter, as revenue dropped 6% year-over-year to $10.48 billion.
Delta CEO Ed Bastian told analysts and reporters in an Oct. 13 conference call that US airlines are experiencing the “weakest revenue environment in recent memory.”
In addition to the revenue issues in the general environment, Delta took a $100 million revenue hit in the quarter from the carrier’s August system crash that led to 2,300 canceled flights over three days. Delta’s third-quarter unit revenue, as measured in PRASM, declined 6.8% year-over-year to 13.14 cents.
Bastian noted that the quarter was the seventh in a row in which Delta’s unit revenue has declined, and said the Atlanta-based airline is determined to return to positive PRASM growth. To that end, Delta is taking a conservative approach to capacity, which will be capped at 1% growth in the fourth quarter. That 1% capacity growth level will be maintained throughout 2017, Bastian said.
“The challenge is to get [unit revenue growth] back positive and we’re optimistic that’s exactly what we’re doing,” he said. Bastian explained that a lack of pricing power, not weak demand, is the main reason for the weak revenue environment.
Delta credited cost control with maintaining strong probability despite the revenue troubles. It reduced third-quarter expenses 4% year-over-year to $8.51 billion, including $397 million in savings on aircraft fuel costs. Third-quarter operating income was $1.97 billion, down 11% from an operating profit of $2.21 billion in the prior-year period.
Delta’s third-quarter system traffic decreased 0.2% to 58.97 billion RPMs on a 1.5% rise in capacity to 69.03 billion ASMs, producing a load factor of 85.4%, down 1.4 points. Yield fell 5.3% to 15.38 cents.
Aaron Karp [email protected]
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Delta 3Q net profit down 4%; caps capacity growth at 1% through 2017
Aaron Karp
Oct 13, 2016
Delta Air Lines A330-300
Delta Air Lines A330-300
Rob Finlayson
Delta Air Lines reported a third-quarter 2016 net profit of $1.26 billion, down 4% from net income of $1.32 billion in the 2015 September quarter, as revenue dropped 6% year-over-year to $10.48 billion.
Delta CEO Ed Bastian told analysts and reporters in an Oct. 13 conference call that US airlines are experiencing the “weakest revenue environment in recent memory.”
In addition to the revenue issues in the general environment, Delta took a $100 million revenue hit in the quarter from the carrier’s August system crash that led to 2,300 canceled flights over three days. Delta’s third-quarter unit revenue, as measured in PRASM, declined 6.8% year-over-year to 13.14 cents.
Bastian noted that the quarter was the seventh in a row in which Delta’s unit revenue has declined, and said the Atlanta-based airline is determined to return to positive PRASM growth. To that end, Delta is taking a conservative approach to capacity, which will be capped at 1% growth in the fourth quarter. That 1% capacity growth level will be maintained throughout 2017, Bastian said.
“The challenge is to get [unit revenue growth] back positive and we’re optimistic that’s exactly what we’re doing,” he said. Bastian explained that a lack of pricing power, not weak demand, is the main reason for the weak revenue environment.
Delta credited cost control with maintaining strong probability despite the revenue troubles. It reduced third-quarter expenses 4% year-over-year to $8.51 billion, including $397 million in savings on aircraft fuel costs. Third-quarter operating income was $1.97 billion, down 11% from an operating profit of $2.21 billion in the prior-year period.
Delta’s third-quarter system traffic decreased 0.2% to 58.97 billion RPMs on a 1.5% rise in capacity to 69.03 billion ASMs, producing a load factor of 85.4%, down 1.4 points. Yield fell 5.3% to 15.38 cents.
Aaron Karp [email protected]
RELATED MEDIA:
Aviation News Gallery: This Week in Pictures-Oct. 10-14
Share This Article
Please log in or register to post comments.
RELATED ARTICLES
Financial Roundup: World Airlines’ 3Q and 9M results
Delta 3Q net profit jumps to $1.3 billion
AirAsia X reports 3Q net loss on capacity surge
Southwest 3Q net profit rises 77.5% on robust capacity growth
United slows capacity growth; 4Q transatlantic ASMs to be down 1%-2%
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