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Delta Reports Financial and Operating Performance for March 2016

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ATLANTA, April 4, 2016 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) today reported financial and operating performance for March 2016.

Delta Air Lines and the Delta Connection carriers offer service to nearly 370 destinations on six continents. For more information visit news.delta.com.

Consolidated passenger unit revenue (PRASM) for the month of March declined 5.0% year over year. Results for the month include a 1.5 point headwind from foreign exchange and a $5 million impact from the recent events in Brussels. While there was pressure on close-in yields during the month, demand remains solid with forward bookings tracking ahead of last year.

In an Investor Update issued this morning, Delta announced that it expects operating margin to be in the 18% - 19% range and its unit revenue to decline approximately 4.5% for the March quarter.

The company's financial and operating performance is detailed below.    

Preliminary Financial and Operating Results

 

March consolidated PRASM change year over year

(5.0)%

March mainline completion factor

99.9%

March on-time performance (preliminary DOT A14)

87.8%





Delta Air Lines serves nearly 180 million customers each year. In 2016, Delta was named to Fortune's top 50 Most Admired Companies in addition to being named the most admired airline for the fifth time in six years. Additionally, Delta has ranked No.1 in the Business Travel News Annual Airline survey for an unprecedented five consecutive years. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 324 destinations in 58 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 800 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia as well as a joint venture with Virgin Atlantic. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with key hubs and markets including Amsterdam, Atlanta, Boston, Detroit, Los Angeles, Minneapolis/St. Paul, New York-JFK and LaGuardia, London-Heathrow, Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita. Delta has invested billions of dollars in airport facilities, global products and services, and technology to enhance the customer experience in the air and on the ground. Additional information is available on the Delta News Hub, as well as delta.com, Twitter @DeltaNewsHub, Google.com/+Delta, Facebook.com/delta and Delta's blog takingoff.delta.com.

Forward Looking Statements

Statements in this press release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements.  These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the impact of rebalancing our hedge portfolio, recording mark-to-market adjustments or posting collateral in connection with our fuel hedge contracts; the availability of aircraft fuel; the effects of terrorist attacks or geopolitical conflict; the possible effects of accidents involving our aircraft; the restrictions that financial covenants in our financing agreements will have on our financial and business operations; labor issues; interruptions or disruptions in service at one of our hub or gateway airports; disruptions or security breaches of our information technology infrastructure; our dependence on technology in our operations; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third party regional carriers; failure or inability of insurance to cover a significant liability at Monroe's Trainer refinery; the impact of environmental regulation on the Trainer refinery, including costs related to renewable fuel standard regulations; our ability to retain management and key employees; competitive conditions in the airline industry; the effects of extensive government regulation on our business; the sensitivity of the airline industry to prolonged periods of stagnant or weak economic conditions; and the effects of the rapid spread of contagious illnesses. 

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015.  Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of Apr. 4, 2016, and which we have no current intention to update.

Non-GAAP Reconciliation

Delta sometimes uses information ("non-GAAP financial measures") that is derived from the Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures.

Forward Looking Projections. Delta is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be estimated at this time.

Operating Margin, adjusted for special items

We adjust for the following items to determine operating margin, adjusted for special items, for the reasons described below:

  • Mark-to-market ("MTM") adjustments and settlements. MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash received or paid on hedge contracts settled during the period. These items adjust fuel expense to show the economic impact of hedging, including cash received or paid on hedge contracts during the period. Adjusting for these items allows investors to better understand and analyze our core operational performance in the periods shown.
  • Restructuring and other. Because of the variability in restructuring and other, the adjustment for this item is helpful to investors to analyze our recurring core performance in the periods shown.
  • Refinery Sales. Delta's refinery segment provides jet fuel to the airline segment from its own production and from jet fuel obtained through agreements with third parties. Activities of the refinery segment are primarily for the benefit of the airline. However, from time to time, the refinery sells fuel by-products to third parties. These sales are recorded gross within other revenue and other operating expense. We believe adjusting for refinery sales allows investors to better understand and analyze the impact of fuel cost on our results in the periods shown.

 











Three Months Ended











March 31,











(Projected)













2016

2015

Operating margin







16.2% to 17.0%

14.9%

Adjusted for:











MTM adjustments and settlements





1.6% to 1.8%

(6.3)%

Restructuring and other





-

0.1%

Refinery sales







0.2%

0.1%

Operating margin, adjusted





18.0% to 19.0%

8.8%















 







Monthly Traffic Results (a)



Year to Date Traffic Results (a)





































































Mar 2016



Mar 2015



Change



Mar 2016



Mar 2015



Change

































RPMs (000):



























Domestic

11,306,473



10,902,638



3.7%



29,661,658



28,041,914



5.8%







Delta Mainline

9,477,252



9,059,253



4.6%



24,883,058



23,220,679



7.2%







Regional

1,829,221



1,843,385



(0.8%)



4,778,600



4,821,235



(0.9%)





International

6,452,634



6,643,003



(2.9%)



18,055,265



18,178,949



(0.7%)







Latin America

1,974,189



1,848,561



6.8%



5,677,934



5,274,578



7.6%







Delta Mainline

1,918,674



1,812,862



5.8%



5,519,729



5,179,094



6.6%







       Regional

55,515



35,699



55.5%



158,205



95,484



65.7%







Atlantic

2,598,520



2,722,976



(4.6%)



6,870,786



7,102,327



(3.3%)







Pacific

1,879,925



2,071,466



(9.2%)



5,506,545



5,802,044



(5.1%)





Total System

17,759,107



17,545,641



1.2%



47,716,922



46,220,863



3.2%































































ASMs (000):



























Domestic

13,172,803



12,529,110



5.1%



35,835,297



33,712,247



6.3%







Delta Mainline

10,911,225



10,258,016



6.4%



29,603,343



27,416,335



8.0%







Regional

2,261,578



2,271,094



(0.4%)



6,231,954



6,295,912



(1.0%)





International

7,771,342



8,103,263



(4.1%)



22,304,514



22,884,861



(2.5%)







Latin America

2,354,004



2,269,923



3.7%



6,849,438



6,482,403



5.7%







Delta Mainline

2,285,093



2,223,966



2.7%



6,649,412



6,352,367



4.7%







       Regional

68,911



45,957



49.9%



200,026



130,036



53.8%







Atlantic

3,269,334



3,438,637



(4.9%)



9,159,944



9,483,243



(3.4%)







Pacific

2,148,004



2,394,703



(10.3%)



6,295,133



6,919,215



(9.0%)





Total System

20,944,145



20,632,373



1.5%



58,139,811



56,597,108



2.7%































































Load Factor:



























Domestic

85.8%



87.0%



(1.2)

pts

82.8%



83.2%



(0.4)

pts





Delta Mainline

86.9%



88.3%



(1.4)

pts

84.1%



84.7%



(0.6)

pts





Regional

80.9%



81.2%



(0.3)

pts

76.7%



76.6%



0.1

pts



International

83.0%



82.0%



1.0

pts

80.9%



79.4%



1.5

pts





Latin America

83.9%



81.4%



2.5

pts

82.9%



81.4%



1.5

pts





Delta Mainline

84.0%



81.5%



2.5

pts

83.0%



81.5%



1.5

pts





       Regional

80.6%



77.7%



2.9

pts

79.1%



73.4%



5.7

pts





Atlantic

79.5%



79.2%



0.3

pts

75.0%



74.9%



0.1

pts





Pacific

87.5%



86.5%



1.0

pts

87.5%



83.9%



3.6

pts



Total System

84.8%



85.0%



(0.2)

pts

82.1%



81.7%



0.4

pts































Mainline Completion Factor

99.9%



99.3%



0.6

pts











































Passengers Boarded

15,773,717



15,454,167



2.1%



41,907,801



40,004,251



4.8%































































Cargo Ton Miles (000):

162,674



197,247



(17.5%)



474,561



546,753



(13.2%)

































aResults include flights operated under contract carrier arrangements



















 

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SOURCE Delta Air Lines

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