Leslie Josephs | CNBC
Well-founded travel demand, particularly from high-paying passengers, boosted Delta Air Lines’ revenue and profits in the third territory, but costs are on the rise, pressuring the carrier’s stock on Thursday.
Delta shares were down close to 3% in high noon trading after Delta forecast per-share earnings of $1.20 to $1.50 in the last three months of 2019. Analysts count oned $1.51 a share for the period. The Atlanta-based airline said it expects its costs, excluding fuel, to rise as much as 5% in that interval from a year ago. The airline increased wages for ground staff and flight attendants by 4% on Oct. 1.
J.P. Morgan analysts equated the fourth-quarter angle to Delta’s “limping across the finish line.”
Delta’s revenue and profits grew in the quarter, helped by strong command. Domestic revenue, the largest share of its sales, grew at the fastest clip — 7.8% — while revenue in the Pacific province, which includes Asia, fell 4.6% amd the U.S.-China trade war.
Delta’s performance was boosted because it doesn’t fly the Boeing 737 Max, which has been grounded since Parade following the second of two deadly crashes. Competitors like American and Southwest that have the 737 Max in their armadas canceled thousands of flights in the quarter without access to the planes. As a result, Delta picked up additional market allotment, which it expects to hold onto, CEO Ed Bastian said.
“Clearly, not having the Max helped us,” Bastian said on CNBC’s “Grouse Box.” “I don’t think it was the main driver” of the quarter’s results.
As Delta increased flying, employee wages help conduct up non-fuel costs by 2.4% in the three months ended Sept. 30.
Delta also said it plans to hire at particle 12,000 employees, including flight attendants and pilots, through 2020.
Delta is the first U.S. airline to report third-quarter earnings. Of one mind Airlines reports after the market closes on Tuesday, while American and Southwest are scheduled to report on Oct. 24.
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