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Delta Air Lines

Delta Revenue Rises, While Income Drops

Delta Revenue Rises, While Income Drops
Joe Cortez

Carrier reports increase in passenger unit revenue, but net income slumps over 20 percent

It’s a case of good news and bad news for Delta Air Lines: While passenger unit revenue increased over the past three months, overall income has nosedived in comparison to previous years. The Atlanta-based carrier announced their 2017 second quarter financials on Thursday, July 13, with earnings per diluted share of $1.64.

“The June quarter ranks among the best in Delta’s history as our people delivered top financial, operational, and customer satisfaction results,” Ed Bastian, CEO of the airline, said in a press release. “While 2017 is a transition period for Delta, we are encouraged by the improvement in unit revenues, leading to increasing conviction in our ability to expand margins as we move through the back half of the year.”

During the second quarter, the airline found a total increase of 4.4 percent on domestic passenger unit revenue, and 3.3 percent worldwide. The carrier credited their multiple passenger options, including basic economy seating and upgrade purchasing, as part of the reason for the increase.

However, compared to the same six months in 2016, net income dropped over 20 percent, missing analysts’ performance expectations for the quarter. According to Delta, the highest costs over the past three months included fuel, passenger services, aircraft rent and contract services.

As the airline moves into the third quarter, they expect an operating margin of up to 20 percent, with passenger unit revenue increasing as much as 4.5 percent. Wall Street was not impressed with the report, sending Delta stock down by 1.77 percent at the market close.

[Photo: Shutterstock]

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