Delta Air Lines Second Quarter Earnings Fall

PRASM up 2.5% reversing two years of declines


By: Theo Nichols

July 13 2017



Delta Air Lines


Delta’s second quarter net income fell 20.8% year-over-year to $1.22 billion as a result of an increase in operating expenses. Delta’s consolidated unit cost was up 8.7% from the second quarter of 2016 driven by higher salary and fuel-related costs. At 1:42 pm eastern time Delta’s stock price was trading down 2%.

"The June quarter represented the peak for non-fuel cost pressures this year and we expect our CASM trajectory to moderate to approximately 2 percent for the September quarter as we annualize product investments, improve productivity through upgauging and better asset utilization, and lap one-time costs from last August's technology outage," said Paul Jacobson, Delta's chief financial officer.

Although Delta missed on earnings, the Atlanta-based carrier reported positive revenue figures. Total revenue was up 3.3% year-over-year to $10.8 billion resulting in an 18.4% operating margin. Wall street’s favorite metric for airlines, passenger unit revenue (PRASM), was up 2.5% as revenue passenger miles (RPMs) increased 2.4% on a 0.4% increase in capacity.

Delta saw its biggest revenue gains in the U.S. domestic market and latin america while revenue nose-dived in the pacific region and stayed flat in the atlantic market.

For the third quarter of 2017, Delta is projecting a 2.5-4.5% increase in PRASM with an operating margin of 18-20%.


Delta Air Lines earnings


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