Buoyed by strong profits from its branded fare offerings,
Delta plans to boost the number of premium seats on its aircraft by more than
10% this year.
"Really the backbone of our commercial strategy is to
increase the number of premium seats we have in the marketplace," Delta
president Glen Hauenstein said during the airline's first-quarter earnings call
Thursday.
Delta will add the premium seats as it upgauges its fleet
with larger aircraft. The carrier expects to take delivery of 50 aircraft
through the remainder of 2018.
In recent years, Delta has increased segmentation of its fares with the
addition of Basic Economy seats, the introduction of Premium Economy cabins on
international flights and an upgrade of its Delta One business class product on
new widebody deliveries. Those products join standard economy seats, which it calls
Main Cabin, and the extra-legroom Comfort Plus seats at the front of the
economy cabin.
Delta reported Thursday that branded fares drove $421
million in premium upsell revenue during the first quarter, up 23%
year-over-year.
Overall, Delta reported net income for the first quarter of
$547 million, off 2% from last year. The carrier brought in record
first-quarter revenue of $9.97 billion, up 10% but $80 million below analyst
expectations, according to the website Seeking Alpha.
Revenue was boosted by a 4.3% uptick in yield (the amount
Delta earned per mile flown by passengers). Yield increases of 6% for business
customers and of 8.6% in the transatlantic market buoyed that figure.
Delta's record revenue was offset by a 13% increase in
expenses, driven by rising fuel and labor costs and a 14% bump in depreciation expenses
as Delta retires aircraft.
Delta's earnings per share in the first quarter was 74 cents,
beating analyst expectation by 1 cent.