Delta profit beats as cost controls help offset higher fuel expenses
(Reuters) - Delta Air Lines (DAL.N) reported a third-quarter profit that beat analysts’ estimates on Thursday as strong demand for air travel and tight control over costs helped the airline battle rising fuel expenses.
With oil prices hovering near their four-year highs, Delta and its peers such as American Airlines Group Inc (AAL.O) and Southwest Airlines Co (LUV.N), are facing a surge in fuel costs that is weighing on profit even as demand for air travel remains strong.
To combat rising fuel expenses, airlines have been increasing ticket prices, using more fuel efficient planes and boosting baggage fees.
“Continued focus on cost control ... gives us confidence in our ability to keep our non-fuel unit cost growth below 2 percent next year,” Delta Chief Financial Officer Paul Jacobson said.
Delta also said corporate travel remained strong in the United States and the company does not see an impact on demand from rising interest rates.
The carrier’s net income rose to $1.31 billion, or $1.91 per share, in the quarter ended Sept. 30 from $1.16 billion, or $1.61 per share, a year earlier.
On an adjusted basis, Delta earned $1.80 per share, beating analysts’ average estimate of $1.74, according to Thomson Reuters I/B/E/S.
Total operating revenue rose to $11.95 billion from $11.06 billion.
Reporting by Tracy Rucinski in Chicago and Ankit Ajmera in Bengaluru; Editing by Anil D'Silva
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