Delta Air Lines reported a big boost in its first quarter profit, despite a multi-million dollar hit from thousands of flight cancellations during winter storms.
Atlanta-based Delta’s quarterly net income of $213 million, or 25 cents a share, rose significantly from a year ago. In the same period of 2013, Delta had net income of $7 million, or 1 cent a share.
The larger profit came on a 5 percent increase in operating revenue.
“The numbers reflect a resilient foundation that’s really based on the creativity and execution of the people at Delta,” the carrier’s chief executive, Richard Anderson, said during an investor conference call.
Still, Delta faced a number of challenges in the quarter, including the cancellation of 17,000 flights due to severe weather in Atlanta and other cities, which cost the airline $90 million in revenue.
Delta also lost $41 million from operations at its Trainer oil refinery in the first quarter, after it shut down operations for modifications to boost production of jet fuel and diesel. The refinery is back in operation and expected to be profitable in the second quarter, Delta president Ed Bastian said.
Delta posted a $31 million loss from its 49 percent ownership stake in British carrier Virgin Atlantic, reflecting its share of Virgin’s quarterly loss.
Delta executives said the outlook for the year is positive, with fuel prices relatively stable and strong bookings for May and June. They also said the company is making progress on reducing debt and generating returns for shareholders through dividends and share buybacks.
The airline is also looking to add international flights in Atlanta, with Anderson saying Delta plans to participate in Hartsfield-Jackson International Airport’s new incentive program for international flights.
The Atlanta airport plans to launch the program this summer to offer up to $2 million incentives to airlines that add international flights from Atlanta, waiving landing fees and offering other measures like promotional funding for new routes. The Atlanta City Council approved the program this week.
Delta plans “on being able to qualify for much of the $2 million,” Anderson said. Already, he said the landing fees Delta pays to land in Atlanta are half of what it pays in Miami.
“Atlanta is by far the most efficient airport to land an airplane in the United States,” Anderson said.
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