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Delta Airlines was the first airline to report Q1 earnings on Thursday lower on high jet fuel costs foreshadowed at this years ISTAT Americas conference. Severe winter and spring storms on the East Coast despite record passenger counts.

Jet Fuel Price Index 4 9 2018

$DAL Fuel costs jumped 20% vs. a year earlier, as crude oil prices yesterday rose to their highest levels since 2014.

Earnings Consensus Forecast

Earnings fell 4% to 73 cents a share, better than 72 cents expected but revenue of $9.76 billion was lower than the expected $9.82 billion. Unit revenue increased 5%, at the high end of its expectations. Passenger capacity grew 2.7%.

Delta Air Lines Inc NYSE: $DAL

April 12, 2018 Open $52.57 ▲ 1.09 (2.12%)

Outlook

"For the June quarter, Delta expects solid top-line growth and an improving cost trajectory will mitigate the impact of higher fuel prices," the airline said.

  • The Atlanta-based carrier sees Q2 EPS of $1.80-$2, in line with consensus for $1.92.
  • Delta Air Lines predicts unit revenue will climb 3%-5% and capacity should grow 3%-4%.

Note: This story was updated after $DAL Earnings Report

Rising Jet Fuel Costs Hit Airlines Margins

Jet Fuel March 30 18Overseas economies have improved and the weaker US dollar has helped tourism (storms aside). The concern is how much higher jet-fuel prices have hit margins. The storms were also a factor here affecting the supply of jet fuel.

Jet Fuel and Crude OilThere is not a ton of room to play with as competition is keeping fares relatively low. Taxes from the oil shock of 2008 remain with consumers not elastic previous to that period alos.

The ISTAT aviation conference was attended by Boeing $BA, United Airlines $UAL, Delta Air Lines $DAL and American Airlines $AAL among others.

Airlines have been opening up the check books to modernize their fleets with different strategies emerging for the different carriers. All eyes will be on the confernce call

US airlines' passenger count reached record high in 2017

US airlines passenger count hit a new all-time high in 2017, Bureau of Transportation Statistics data show. Systemwide passengers rose 3.1% to 849.3 million last year, surpassing the previous high of 824 million came in 2016.

  • Systemwide revenue passenger miles (RPMs) in 2017 rose 3.3% to a new all-time annual high of 964.3 billion.
  • Domestic RPMs also reached a new all-time high of 683.7 billion, up 3.6% from the previous record high in 2016.

BTS reported the systemwide load factor, a measure of airline passenger capacity, was at 83.5% in 2017, up 0.1 percentage points from 2016, but down 0.3 points from the all-time annual high of 83.8% in 2015.

Source: Platts, IATA, TradersCommunity

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