Delta revises Q3 operating margin upwards

Washington DC
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Delta Air Lines now estimates it should post a 9-11% operating margin during the third quarter versus prior projections of 7-9%.

Carrier president Ed Bastian offered the better than expected projections during a 13 September presentation at the Deutsche Bank Aviation and Transportation Conference.

Bastian cited three factors driving the better performance - a roughly $70 million benefit from the cessation of fuel excise tax collected by the Federal Aviation Administration during the agency's partial shutdown from 23 July to 11 August, fuel prices of $3.07 per gallon compared with prior estimates of $3.20 and strength in close-in bookings that is driving incremental revenue.

Unit revenues at Delta during August grew 11.5%, said Bastian. He predicted Delta would see double-digit yields in all regions during the fourth quarter.

Delta also during the fourth quarter is reducing capacity by 5% year-over-year, and during the first quarter of 2012 expects its available seat miles to fall about 5% year-over-year.

Bastian stressed during the northern hemisphere winter Delta is flying 20% fewer seats than in the summer season.

"We're done making money in the summer and giving it back in the winter," Bastian remarked.