Delta, fresh off its best day ever, raises its profit forecast
Delta Air Lines, the one major US airline not hit by the Boeing 737 Max crisis, reported strong financial results Thursday and predicted even better times ahead.
The airline raised its 2019 profit forecast to between $6.75 to $7.25 a share, well above the $5.67 it earned in 2018. At the start of the year it had been predicting a per-share profit of only $6.00 to $7.00.
Rivals American Airlines, Southwest and United have all been hit by the grounding of the 737 Max, which forced each of them to cancel more than 100 flights a day since March. But Delta does not have any of the 737 Max planes in its fleet, nor has it ordered any.
The 737 Max probably won’t be able to return to service until the end of the year, meaning continued problems for Delta’s rivals. American, the world’s largest airline, is also locked in a labor dispute with its mechanics which has forced it to cancel about 4% of its flights in June.
Delta had already told investors to expect strong results for the second quarter. It announced improved sales, earnings and profit margins. Unit revenue, a measure of airfares, rose 3.6%. That’s much better than the guidance Delta gave three months ago. A strong economy, particularly low unemployment, has helped lift demand for air travel and fares.
The airline said the third quarter is already off to a strong start. This past Sunday, at the end of the US Independence Day weekend, Delta generated the most sales in a single day in the airline’s history.
The company said full-year revenue should grow by $3 billion above last year’s total. The increased revenue is coming not just from higher fares but from fuller planes as it reported 88% of its seats filled in the quarter, another record for the company.
Shares of Delta were higher in pre-market trading on the report.