Amid industrywide fare hikes to make up for high fuel costs, Atlanta-based Delta Air Lines said it boosted first-quarter operating revenue by 9 percent.
Delta, which is still coping with fuel prices, reported $124 million in net income, or 15 cents a share, in the first quarter ended March 31. That's better than its $318 million loss, or 38 cents a share, a year ago.
Excluding special items such as gains from contractual hedges locking in fuel prices, Delta said it would have posted a $39 million net loss for the quarter, or 5 cents a share. The special items included $151 million in fuel hedge gains; a $39 million gain from a swap of flying rights with US Airways in New York and Washington; and a $27 million charge for aircraft, facilities and other items.
The company reported $8.4 billion in first-quarter operating revenue, up 9 percent year-over-year, even though it cut flight capacity by 3 percent in the quarter.
"We’ve been successful in passing on high fuel costs," Delta Chief Executive Richard Anderson said during a conference call with analysts discussing the results.
The airline's fuel expense for the quarter increased by $250 million year-over-year, which it offset by $45 million in fuel hedge gains. Its total operating expense increased 2 percent.
The company said it is working on trimming some of its costs, including cutting staff by offering early retirement packages to employees this month as it puts Northwest employees on the same system of pay and benefits as Delta employees. Those who take the early retirement offer are expected to leave the company after the busy summer travel season.
Looking forward, Delta expects to be profitable in the second quarter. Anderson said he expects the full year profit will be better than last year's, even with higher fuel costs.
The company also is in early stages of negotiations with its pilots union on a new labor contract, and Anderson said the company aims to reach a deal by the end of the year, when the current contract period ends. Airline contracts do not technically expire, but become amendable at the end of the contract period.
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