Delta posts $1 billion profit
Atlanta-based Delta Air Lines reported a $1 billion profit in the third quarter, after boosting revenue slightly while cutting flight capacity and staff.
The airline nearly doubled its profit compared with the same quarter last year, though this year’s September quarter profit included a $440 million gain in the value of its fuel hedges for the future.
Some of Delta’s other special items in its results are related to the airline’s cutbacks, including a $122 million charge including costs for the closure of its regional subsidiary Comair at the end of September, and a $66 million charge for severance and other costs as part a staff reduction through the early retirements of 2,000 workers this year. Delta’s count of full-time equivalent employees declined to 76,626 in the quarter, down from 79,709 a year ago. Its fleet shrank to 725 planes in the quarter, down from 790 a year earlier.
Other special items come from Delta’s strategies to bolster its position in New York and pay down debt. Delta reported a $39 million gain from the swap of flying rights with US Airways between New York LaGuardia and Washington Reagan airports, as part of Delta’s efforts to establish a domestic hub at LaGuardia to complement its international hub at John F. Kennedy International Airport in New York. And the company reported a $12 million loss from extinguishing debt.
The airline had operating revenue of $9.9 billion in the third quarter, up 1 percent year-over-year. Its operating expense totaled $8.6 billion, down 4 percent.
Delta’s $1 billion in net income amounted to $1.23 per share, up from $549 million, or 65 cents per share, in the third quarter of 2011.
About the Author
As business team lead, Kelly Yamanouchi edits and writes business stories. She graduated from Harvard and has a master's degree from Northwestern.
