Thanks to relatively low fuel costs and strong revenue, Delta Air Lines expects to report record profits for 2013.
The Atlanta-based airline expects a $2.5 billion pre-tax profit, up from $1 billion last year.
Airlines historically have seen their finances turn on the whim of fuel costs, but Delta said it aims to cover any increases in fuel costs through fares or through cuts in flying.
Yet Delta has also had some challenges this year — including losing about $100 million from operations of its Pennsylvania oil refinery, acquired last year. The company expects the refinery to be profitable next year.
Meanwhile, Delta chief executive Richard Anderson said Delta has been doing well in competition with Southwest Airlines, which began flying to Atlanta last year.
Southwest has cut flights from more than 200 daily flights under AirTran to about 150 today, Anderson said. “We compete quite well in competition against Southwest,” Anderson said. “We’re the business traveler’s airline.”
To better compete against other airlines, Delta says it is working to “decommoditize” flying with the hope that travelers will eventually be willing to pay more for a better experience with an airline.
“We believe that in the future, it will be about buying an experience,” rather than just buying a ticket, said Delta’s chief revenue officer Glen Hauenstein. “In the past, the only thing you bought from the airline was … a ticket and it led to that awful feeling that you paid $700 and the person next to you paid $79.”
Delta is also looking to extend some of the creature comforts further.
While it has for several years offered wi-fi on domestic flights, Delta has been attempting to add wi-fi on international flights and plans to begin rolling out the service on its Boeing 747s by early next year.
That’s a delay from Delta’s original plan to debut international wi-fi in early 2013. “We’ve had some challenges, candidly, getting approvals” for the satellite-based international wi-fi, said Delta’s chief operating officer Steve Gorman. Delta’s wi-fi provider, Gogo, last week received certification for the satellite connectivity service on the 747.
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