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Delta Posts Higher Quarterly Net Profit

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Delta Air Lines announced a higher quarterly profit on Wednesday and indicated revenue trends looked to be improving following a soft September.

Delta had net income of USD$1.05 billion for the third quarter, compared with USD$549 million a year earlier.

Results included special items, such as a USD$440 million gain tied to fuel hedges that together added up to a USD$279 million gain.

Revenue rose 1 percent to USD$9.92 billion.

Delta said unit revenue would likely rise 4 percent to 5 percent in October after a 3 percent increase in the third quarter, driven by strength in business travel. The carrier added that it expects "robust" leisure traffic for the Thanksgiving and Christmas holidays.

Performance in unit revenue weakened at many US airlines toward the end of the third quarter, which is a traditionally strong period that usually benefits from some summer travel.

FOCUS ON COSTS

Delta said it would undertake cost cutting to hold down non-fuel expenses, which have risen in recent quarters. The carrier said it planned a USD$1 billion program over the next two years that will include replacing 50-seat jets with larger aircraft that will cost less to operate, and shifting more business to its website.

US carriers have merged, stopped flying unprofitable routes and raised ticket prices to recover from the 2008-09 downturn. Carriers have also cut back flying to match demand and created new revenue streams with baggage and food fees, moves that have helped keep profits coming in the face of volatile fuel prices.

(Reuters)