ClipperDelta

http://news.delta.com/2014-07-23-Del...Quarter-Profit

Another round of record profits:

Net Income excluding specials: $889m = +8.4% margin
Net Income (GAAP): $801m (up 17%) = +7.5% margin
Operating Income excluding specials = $1.61 billion (+15.1% margin)
Operating Income = $1.58 billion (+14.9% margin)
Total Revenues = $10.62 billion (up 9%)
Q2 PRASM up 5.7% (mostly driven by DOmestic up 10% and Atlantic up 7%, while Pacific was down 3%).

Expect to have an operating margin (excluding specials) of +15 to 17% for Q3 2014.

bubbashow

HOME RUN! Congratulations to DL Management and all of the hard-working employees that made this happen. INCREDIBLE!

Beckles

How long before the pilot union demands big raises to make up for their past givebacks?

Zeeb

Consolidation clearly has worked out well for consumers...

hazelrah

Whenever their current contract is up for renegotiation.

Beckles

The ability of the deregulated US airline industry to make huge profits over periods of time has been proven in the past and is currently being proven again. The ability of the deregulated US airline industry to remain profitable over an extended period of time has yet to be proven.

Zeeb

+1. Only time will tell how many of the things they are doing to drive short term gains end up being profitable long term, especially if there is a downturn in the economy. Right now competition is low and demand is high.

3Cforme

The contract has a set amendable date which can be pulled forward by mutual consent. If no new agreement is reached, work continues at last rates/rules while negotiation continues or the union is released by the NMB to seek 'self help', most confrontationally, a strike.

IIRC, the Delta pilots' contract amendable date is 12/2015.

Beckles

It's not just a downturn in the economy that could hurt the airlines, there are other factors, as I already alluded to there will be labor, who took some significant cuts in pay in recent years and will likely demand some of those cuts back; increased competition, because although there are claims that the barriers to entry are high, there always seems to be someone willing to throw money in to start new airlines in good times (and plenty of plane lessors looking for customers) and vast majority of airports have available capacity; and fuel prices, which while they are still relatively high, they have been remarkably stable for over three years now, it's not high or low fuel prices that really impact airlines, as much as volatility of fuel prices.

jtrue28

Are they still charging a "fuel surcharge"? If only I had a way-back machine, I could go build a house on some oil rich desert land in Saudi Arabia. #bling-bling

HongKonger

I wonder why TPAC PRASM is down 3%.

bennos

Yeah, good thing all those changes to the FFP that haven't yet taken effect were clearly so critical for financial success!

Beckles

Or they can 'Work to Rule' or undertake unsanctioned actions, e.g., 'Sick Out' or 'SFH'.

Zeeb

And changing the FFP to reward current purchases rather than driving marginal purchases will surely have no downside if demand drops below capacity. No sir.

bubbashow

Key word. Right now, the proposed changes (ESP with UA following) are in line to make things better into next year and beyond.