Delta Air Lines Q1 Profit Drops 36 Percent
Delta Air Lines reported a 36 percent drop in first quarter net profit on Wednesday as higher fuel expenses increased operating costs.
Delta’s net earnings of USD$603 million were down from 2016’s first quarter of $946 million as unit costs increased by 5.5 percent. Pre-tax income was also down 36 percent at $915 million, from $1.43 billion last year. Delta blamed higher fuel prices as the primary cause of the result.
Revenue for the quarter was 1.1 percent down at $9.15 billion as passenger revenue per available seat mile (PRASM) dropped 0.5 percent.
Passenger traffic in revenue passenger miles (RPM) rose 0.5 percent as Delta reduced available seat miles (ASM) capacity by 0.5 percent. The resulting passenger load factor was up 0.8 percentage points at 82.9 percent.
“March marked the first month of positive passenger unit revenues since November 2015 and we are encouraged by the current fare and demand trends across the network,” Delta President Glen Hauenstein said.
“We expect June quarter passenger unit revenues to increase one to three percent and remain positive throughout the year. However, we will keep our full year capacity growth capped at one percent to support this unit revenue momentum and the company’s return to margin expansion.”
Delta said the severe weather in Atlanta last week caused the cancellation of about 4,000 flights as the carrier took several days to recover and return to its normal schedule. Delta said the storm is expected to reduce June quarter pre-tax income by $125 million.