Delta Airlines reports $1.56bn Q1 pre-tax income

Delta Airlines released its financial results for the first-quarter (Q1) to March 31, 2016, including adjusted pre-tax income of $1.56 billion, a $966 million increase over March 2015 quarter. 

Adjusted net income was $1.0 billion or $1.32 per diluted share.  “We have started 2016 with tremendous momentum, generating over $1.5 billion in adjusted pre-tax income, delivering industry-leading operations including 49 days of perfect mainline completion factor for our customers, and reaching our goal of becoming an investment grade company. 

With these results, the Delta people have proven again that they are the very best in the industry,” Ed Bastian, Delta’s incoming chief executive officer, said. 

“We will continue to be disciplined with our business in the face of volatile fuel prices, strengthen our foundation, and prove our position as the airline that consistently delivers top results for our employees, our owners and the customers and communities we serve,” Bastian added.

Revenue Environment

Delta’s operating revenue for the March quarter decreased 1.5 percent, or $137 million, driven by $125 million in foreign currency pressures and a $5 million impact from the recent events in Brussels.  Passenger unit revenues declined 4.6 percent, including 2 points of impact from foreign currency, on a 2.7 percent increase in capacity.

“The momentum with our commercial initiatives, including corporate share gains, Branded Fares, and our partnership with American Express, allowed us to maintain our top line performance in the March quarter despite 40 percent lower market fuel prices and $125 million of pressure from foreign currency,” Glen Hauenstein, Delta’s incoming president said.

“We are forecasting a unit revenue decline of 2.5 – 4.5 percent for the June quarter.  While this is an improvement over our March quarter performance, we are focused on getting unit revenues back to a positive trajectory and we will make adjustments to our fall capacity levels if we are not making sufficient progress over the coming months,” Hauenstein disclosed.

Ifeoma Okeke