oakley outlet 90 million revenue hit from a

90 million revenue hit from a wave of winter storms

FILE In this Oct. 8, 2012 file photo, a Delta Air Lines airplane is parked at Seattle Tacoma International Airport in Seattle. Delta reports quarterly earnings on Wednesday, April 23, 2014. (AP Photo/Ted S. Warren File)

DALLAS Delta Air Lines Inc. is making more money by filling more seats on its planes and paying a bit less for fuel.

Delta’s first quarter profit beat expectations and underscored how most big airlines are prospering with a combination of strong business travel, slightly higher fares and money from extra fees.

Even bad weather couldn’t stop Delta from boosting profit, although it cancelled more than 17,000 flights in January and February double the number from a year ago which cost the company $90 million in revenue and $55 million in pretax income.

oakley outlet The Atlanta based airline said Wednesday that it expects solid demand throughout the year, and it predicted that a key statistic of revenue per mile will grow in the mid single digits during the April through June second quarter.

Delta shares jumped $1.72, or 4.9 per cent, to $36.67 in midday trading after hitting an all time high of $37.41 earlier in the session. They began the day up 27 per cent in 2014.

Delta said that net income in the first quarter was $213 million, or 25 cents per share, up from $7 million, or a penny per share, a year earlier.

Excluding items such as fleet restructuring costs and fuel hedging, Delta earned 33 cents per share. Analysts, who usually exclude one time costs and benefits like that, were expecting 29 cents per share, according to FactSet.

Revenue rose 5 per cent to $8.92 billion, matching analysts’ forecasts.

Passengers flew 4 per cent more miles than in early 2013, which helped boost occupancy to 82 oakley outlet .7 per cent on the average flight, up from 81.2 per cent a year ago. The average fare per mile rose 1 per cent.

Including Delta Connection regional flights, the company spent $2.70 billion on fuel, its largest expense in the quarter. Still, that was a savings of $109 million, or 4 per cent, as Delta paid $3.03 per gallon instead of last year’s $3.24. The company expects total fuel costs of $2.97 to $3.02 per gallon in the second quarter.

The break on fuel spending more than offset an increase of $58 million, or 3 per cent, in labour costs, the company’s second biggest expense at $1.97 billion.

As long as travel demand holds up, Delta should be able to cover those costs.

The company overcame severe winter weather and the shift of Easter travel into April.

The airline’s president, Ed Bastian, said Delta saw gains from corporate travel accounts and passenger fees and predicted that money from fees will rise.

In the 12 months that ended las oakley outlet t Sept. 30, Delta took in $1.66 billion just in fees for checked bags and changing reservations the most of any airline and 22 per cent more than runner up United according to government figures.

Bastian said that “merchandising” that’s other fees such as charging extra for priority boarding, economy seats with more legroom, and upselling to first class grew 20 per cent in a year to $165 million.

“We think we can grow this high margin revenue stream by $500 million annually over the next three years,” h oakley outlet e said on a call with analysts.

Helane Becker, an analyst with Cowen and Co., said Delta was aggressively controlling costs other than fuel and said the company’s outlook for the second quarter was stronger than expected. Standard Poor’s analyst Jim Corridore said Delta was driving the entire industry to focus more on return for shareholders.

Comments are closed.