Delta announces record performance

Delta Air Lines made a pre-tax income of $1.45 billion during the final quarter of 2015, which was up $430 million over the previous year.

Adjusted net income was $926 million, up 51% from the December quarter of 2014.

"Our 2015 performance was a record for Delta on all fronts – with industry-leading operational performance, superior customer satisfaction, and a $5.9 billion adjusted pre-tax profit," said CEO Richard Anderson.

 "As we look ahead to 2016, we have a significant opportunity to improve our performance even further.  With over $3 billion in potential savings from lower fuel prices and numerous commercial, operational and cost initiatives already in place, we expect to again perform in the top tier of the S&P Industrials on earnings growth, margins, and cash flows this year despite global economic challenges."

Delta’s operating revenue for the December quarter fell 2% due to $160 million in foreign currency pressures. 

Passenger unit revenues fell 1.6%, which includes the impact from foreign currency.

"The success of our network actions and commercial initiatives in 2015 allowed us to grow our top line and our unit revenue premium to the industry, while overcoming nearly $700 million of revenue pressure from foreign currency," said Ed Bastian, Delta’s president. 

"Looking ahead, the overall demand environment remains solid. The breadth of our network scale allows us to focus our commercial efforts on those areas of the business with the best opportunity such as the domestic marketplace, while reducing our exposure in some weaker international regions. 

"While we expect international volatility and currency pressures to result in unit revenue declines of 2.5 – 4.5% for the March quarter, we should see over 10 points of margin improvement given our capacity discipline in the face of a more than 50% decline in fuel prices."

Delta’s debt reduction initiative continued to improve the company’s interest expense, producing $35 million in interest savings for the quarter compared to the same period in 2014, it said.

Non-operating expense includes a $75 million loss for the write-off of Delta’s remaining cash holdings in Venezuela.

"Rigorous cost discipline is a key part of the Delta culture, which was proven by our ability to keep non-fuel unit costs flat in 2015 while significantly investing in our people, products and service," said Paul Jacobson, Delta’s chief financial officer. 

"The first half of 2016 will see the most pressure to non-fuel unit costs, and we expect performance will improve through the year as we lap last year’s employee wage increases."