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Low Fuel Price to Raise 11 Percent Profit Next Year, Delta Says

January 7, 2015 By Melanie Quintal

Low Fuel Price to Raise 11 Percent Profit Next Year, Delta SaysOn Thursday, Delta Air Lines is expecting a boosts of at least 11 percent of a pre tax profit next year by cutting off prices of jet fuel and rising revenue. The Atlanta-based company has projected a benefit of $1.7 billion net next year due to low fuel price. As of the New York Stock Exchange, it shares a rose of 4.8 percent. This year, the non-fuel’s growth expenses have slowed to 0.3 percent from 2012’s 4.6 percent. Delta is expecting a growth of less than 2 percent next year, and claimed that it will reduce its costs by retiring its Boeing 747s, 757 and 767. Recently, it has been reported that Delta ordered Airbus at an amount of twenty five units of A330neos and twenty five units of A350-900s.

Above all, the total capacity of Delta will increase only up to 2 percent next year, and that includes a 3 percent raise in domestic capacity. Through several initiatives, Delta is expecting an increase of revenue including fare categories to be discussed on Monday. The latest 5 class structure is an additional to the basic economy which is aimed by travellers who were looking for an economical carrier service. Due to its expansion, Delta’s collaboration with Virgin Atlantic will yield significant revenue for the next following years.

Filed Under: Business & Economy Tagged With: Delta Air Lines

$1.7 Billion Benefit Projected By Delta Air Lines from Low Fuel Costs

January 7, 2015 By Melanie Quintal

$1.7 Billion Benefit Projected By Delta Air Lines from Low Fuel CostsAmong the best fuel hedges, Delta is on the top lists. According to the analysts, the Atlanta-based company expects that the current market prices of fuel will benefit 2015 at a profit of $1.7 billion, and for the current quarter, it will raise its forecast for operating margin. As per the New York Stock Exchange on Thursday, the company shares as high as 3.7% to $47.94 record in early trading. The carrier announced on the same day that by next year, prices of fuel are expected to fall at least 70 cents per gallon at a range of $2.10-$2.20.

Since June, the prices of crude have fallen by 40 percent caused by the oversupply and the refusal of OPEC’s to cut down its ceiling output. David Fintzen, the analyst of Barclays Capital said that in 2015, the cost of fuel in U.S. airlines will decline by $10 billion. It has also been revealed by President Ed Bastian on Thursday during the investor conference that, the company is anticipating a pre-tax income next year with an amount of $5 billion, driven by lower costs of fuel, higher revenue and cost controls of non-fuel. Additionally, the company has raised its forecast on operating margin from 10-12% to 11.5-12.5% this December. According to Richard Anderson, the Chief Executive of the company, next year Delta is anticipating a return to shareholders an amount of $1.5 billion through dividends and share buybacks.

Filed Under: Business & Economy Tagged With: Delta Air Lines

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