DieselDragRacer
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Delta Air Lines Inc. (DAL), the world’s second-largest airline, plans further seating-capacity cuts after higher fuel and maintenance costs pulled second-quarter profit below analysts’ estimates.
Profit excluding certain items was $366 million, or 43 cents a share, the Atlanta-based carrier said today in a statement. That lagged behind the 44-cent average estimate from 13 analysts in a Bloomberg survey. Revenue rose 12 percent to $9.15 billion, compareed with the $9.14 billion projection.
Delta’s jet fuel bill jumped by about $1 billion, an increase of about 39 percent from a year earlier, and aircraft maintenance and payments to regional partners also rose. Delta said it will cut capacity by as much as 5 percent after the peak summer travel season ends to further reduce costs, up from a previous plan of 4 percent.
“High fuel prices are putting significant pressure on the industry,” Chief Executive Officer Richard Anderson said in the statement.
More than 2,000 employees accepted voluntary buyout and early retirement offers, most of them hourly workers, said Eric Torbenson, a spokesman for the carrier. That’s about 3 percent of the company’s workforce of 80,000.
Including $168 million in one-time items for the severance payments, retiring 140 older less-efficient aircraft and consolidating facilities, Delta said its net income declined 58 percent $198 million, or 23 cents a share, from $467 million, or 55 cents, a year earlier.
Airline Earnings
Delta is the second of the biggest U.S. carriers to trail analysts’ earnings estimates for the three months through June. AMR Corp. (AMR)’s American Airlines last week posted a $286 million loss, or 85 cents a share, which was wider than the 81-cent deficit estimated by analysts.
United Continental Holdings Inc. (UAL) and US Airways Group Inc. (LCC) posted profits last week that exceeded analysts’ estimates.
Delta fell 7 cents to $7.95 at 8:14 a.m. before the start of regular trading on the New York Stock Exchange. The shares fell 36 percent this year before today.
United Airlines parent UAL Corp. and Continental Airlines Inc. merged in October in all-stock deal, surpassing Delta as the world’s largest carrier.
To contact the reporter on this story: Mary Jane Credeur in Atlanta at [email protected].
To contact the editor responsible for this story: Ed Dufner at [email protected].
Profit excluding certain items was $366 million, or 43 cents a share, the Atlanta-based carrier said today in a statement. That lagged behind the 44-cent average estimate from 13 analysts in a Bloomberg survey. Revenue rose 12 percent to $9.15 billion, compareed with the $9.14 billion projection.
Delta’s jet fuel bill jumped by about $1 billion, an increase of about 39 percent from a year earlier, and aircraft maintenance and payments to regional partners also rose. Delta said it will cut capacity by as much as 5 percent after the peak summer travel season ends to further reduce costs, up from a previous plan of 4 percent.
“High fuel prices are putting significant pressure on the industry,” Chief Executive Officer Richard Anderson said in the statement.
More than 2,000 employees accepted voluntary buyout and early retirement offers, most of them hourly workers, said Eric Torbenson, a spokesman for the carrier. That’s about 3 percent of the company’s workforce of 80,000.
Including $168 million in one-time items for the severance payments, retiring 140 older less-efficient aircraft and consolidating facilities, Delta said its net income declined 58 percent $198 million, or 23 cents a share, from $467 million, or 55 cents, a year earlier.
Airline Earnings
Delta is the second of the biggest U.S. carriers to trail analysts’ earnings estimates for the three months through June. AMR Corp. (AMR)’s American Airlines last week posted a $286 million loss, or 85 cents a share, which was wider than the 81-cent deficit estimated by analysts.
United Continental Holdings Inc. (UAL) and US Airways Group Inc. (LCC) posted profits last week that exceeded analysts’ estimates.
Delta fell 7 cents to $7.95 at 8:14 a.m. before the start of regular trading on the New York Stock Exchange. The shares fell 36 percent this year before today.
United Airlines parent UAL Corp. and Continental Airlines Inc. merged in October in all-stock deal, surpassing Delta as the world’s largest carrier.
To contact the reporter on this story: Mary Jane Credeur in Atlanta at [email protected].
To contact the editor responsible for this story: Ed Dufner at [email protected].
