Delta Air profit overshadowed by warning on jet fuel prices
BNN Bloomberg
Delta Air Lines Inc. reported the first quarterly profit excluding federal aid at a major U.S. carrier since the start of the pandemic but said rising jet fuel prices are a threat to staying in the black.
Delta Air Lines Inc. reported the first quarterly profit excluding federal aid at a major U.S. carrier since the start of the pandemic but said rising jet fuel prices are a threat to staying in the black.
The strong performance in the just-ended quarter exceeded analysts’ expectations as the Atlanta-based airline overcame a temporary slowing of demand amid a resurgence of coronavirus-linked fears stemming from the delta variant.
Third-quarter net income, excluding US$1.3 billion in government aid, came to US$194 million, or 30 cents a share, the airline said Wednesday. Analysts had expected a 17 cents a share profit for the period, according to the average of estimates compiled by Bloomberg.
Delta warned that it may see a return to red ink in the current quarter due mainly to higher fuel costs, which it forecasts rising as high as an average of US$2.40 a gallon, up from US$1.94 in the third quarter.
“That’s going to be a limiter on our ability to post a profit in the quarter. At these current fuel levels, it looks like we’ll have a modest loss,” Chief Executive Officer Ed Bastian said in an interview.
Delta shares were little changed at US$43.49 before the start of regular trading in New York. The stock gained 8.3 per cent this year through Tuesday, the worst performance in the S&P 500 Airlines Index.