Riding the wave of low fuel costs, Delta reported net
income of $980 million for the fourth quarter. The momentum came despite a 2%
year-over-year decline in operating revenue, which the carrier attributed to
$160 million in foreign currency pressures.
In total for 2015, the airline reported net income of
$4.5 billion, up from $659 million a year earlier. The fourth-quarter net
income of nearly $1 billion came after a net loss of $712 million in the fourth
quarter of 2014, when Delta wrote down more than $1 billion in fuel hedges.
Delta spent $726 million less on fuel in the most recent fourth
quarter, a decrease of 30%. Operating revenue was $9.5 billion, a decrease of $150 million compared with last
year and $100 million shy of analysts’ expectations.
"As we look ahead to 2016, we have a significant
opportunity to improve our performance even further,” CEO Richard Anderson said
Tuesday, noting continuing drops in fuel prices as well as the airline’s
confidence about demand.
Delta expects fuel to drop from $1.85 per gallon during
the fourth quarter to between $1.20 and $1.25 per gallon this quarter.
The airline’s earnings Tuesday portends to what analysts
expect will be a year of record profits in the U.S. airline industry. United
and Southwest will announce earnings on Thursday, followed by American next
Delta said it plans to be disciplined in expansion in
2016 — growing capacity by between just 0% and 2% — in order to bolster price
and capture the savings offered by cheap jet fuel.
The carrier’s capacity was flat during the fourth quarter
compared to a year earlier, while the number of miles flown by passengers grew
Ticket prices, measured on a per-mile basis, dropped 4%.
Delta’s earnings per share were
$1.18 in the fourth quarter, a penny shy of analyst expectations. Delta stock
closed at $45.96 Tuesday, nearly level with its opening of $45.80.