Delta's Q2 Net Profit Up 85 Percent

Delta Air Lines reported a second-quarter net profit up 85 percent, but forecast a third-quarter drop in unit revenue as the carrier continued to see weaker demand abroad due to the strong US dollar.

Delta earned USD$1.49 billion in the last quarter versus USD$801 million a year ago. On an adjusted basis, profit was USD$1.03 billion, from USD$889 million last year.

The carrier forecast passenger revenue per available seat mile (PRASM), will decline between 4.5 and 6.5 percent in the third quarter.

It estimated capacity would grow about 3 percent in the third quarter but stay flat in the fourth period after the peak summer travel season ends.

"We believe this plan will allow us to get our unit revenue back on the right trajectory by the end of the year," chief financial officer Paul Jacobson said in a memo to employees.

Investors have called on US airlines to restrain capacity growth to match lower demand. However, frequent talks with Wall Street about capacity, which has an impact on prices, have raised eyes at the US Department of Justice and prompted an investigation into whether carriers have worked together illegally to keep air fares high.

Delta expects an operating margin of 19 to 21 percent in the third quarter, compared with 15.2 percent a year earlier.

Delta forecast average fuel costs would be between USD$1.90 and USD$1.95 per gallon in the third quarter, versus USD$2.40 per gallon last quarter to account for hedging losses. It estimated unit costs, excluding fuel and other charges, will stay flat year over year.

The airline said its initiative to roll out fares that are priced differently to include certain amenities contributed USD$56 million to total revenue, which was USD$10.71 billion.