Total passenger revenue increased 5 percent to $7.7 billion, which “shows the strength of Delta’s revenue momentum even through the revenue loss from weather and a shift of the Easter holiday traffic into April,” according to Ed Bastain, Delta’s vice-president.
“We see continued revenue strength as we move through the year from corporate revenue gains, the benefits of the Virgin Atlantic joint venture and improved ancillary revenues. These initiatives, coupled with a solid demand environment, should lead to unit revenue growth in the mid-single digits for the June quarter,” he said.
He disclosed that total operating expense in the quarter increased $18 million year-over-year driven by the impact of employee investments including $79 million higher profit sharing expense, adding that the cost increases were almost fully offset by lower fuel expense, savings from Delta’s structural cost initiatives, and receipt of a $25 million insurance claim related to Superstorm Sandy.
“In the March quarter, the company returned $176 million to shareholders. On March 14, the company paid $51 million to shareholders, which represents a $0.06 per share quarterly dividend.
“In addition, the company repurchased 4 million shares at an average price of $30.94 for a total of $125 million. It has completed $375 million of the $500 million share repurchase plan authorised by Delta’s Board of Directors in May 2013.
“Delta Airlines ended the quarter with $5.6 billion of unrestricted liquidity and adjusted net debt of $9.1 billion, while the company has now achieved nearly $8 billion in net debt reduction since 2009.
“The March quarter’s record results in the face of unprecedented weather show the strength and resilience of Delta. By delivering the industry’s best customer service, operational reliability and financial performance, Delta people continue to show that they are the very best in the business.
“Our work is not finished, and there is great opportunity ahead as we expect the June quarter to produce 14 percent – 16 percent operating margins. We are transforming Delta into a high-quality S&P 500 company that consistently delivers strong earnings growth and shareholder returns,” Richard Anderson, Delta’s CEO, said.
Key accomplishments in the March 2014, quarter include: Recognising the achievements of Delta employees toward meeting the company’s financial and operational goals with $114 million of incentives so far this year, including $99 million in employee profit sharing and $15 million in shared rewards.
Ranking in Fortune’s Top 50 of the World’s Most Admired Companies for the first time in the company’s history, and named as World’s Most Admired Airline for the third time in four years.