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