Delta Air Lines’ financial results were clobbered by Superstorm Sandy in late 2012. But higher fares during the year enabled Delta, one of the world’s biggest airlines, to withstand the storm and turn in one of its best years ever, racking up $1 billion in profits.
“We enter 2013 as a stronger airline,” Delta chief executive Richard Anderson said Tuesday when the company unveiled its latest financial results. The company is seeing improved corporate travel business and growth in ticket sales to Latin America and China, but weaker travel to Japan.
Sandy cost Delta $100 million by wreaking havoc on flights and the airline’s recently-acquired oil refinery. Restructuring, paying off debt and bets on fuel also resulted in special charges that left Delta with a meager $7 million profit in the last quarter of the year — a fraction of the $425 million it notched a year earlier. Delta had hoped the refinery would allow it to save money on fuel. Instead, the refinery lost $63 million in the quarter due to Sandy.
But Delta’s full-year 2012 profit is among its best on record, an improvement over its $854 million in net income in 2011. The airline said excluding special charges, its annual profit would be $1.6 billion.
Delta last month announced plans to acquire a 49 percent stake in Virgin Atlantic and strike a joint venture. The airline is applying for U.S. and European government approvals.
Meanwhile, Delta has been investing in passenger amenities, airport terminal facilities and technology to attract lucrative business travelers and bring in more revenue from fares and fees for extras. But, “those investments have not come without cost,” according to Delta’s chief financial officer Paul Jacobson. The company is working to cut $1 billion in costs and plans to cut flying by 2 to 4 percent this quarter.