As Delta Air Lines kicked
off third-quarter earnings season with a $363
million net profit, the carrier on Wednesday detailed clear signs of a strong
business travel market: Quarterly revenues
grew by double-digit percentages, with particular strength in international and
corporate business, yields continued to surge and the
carrier said it now is leaving more inventory for late-booking, high-yield
travelers.
Delta reported quarterly
revenue grew 18 percent year over year to $9 billion, with particular strength
on the corporate side. "Corporate revenue was up 35 percent year over
year, driven largely by a 27 percent increase in corporate volumes," Delta
president Ed Bastian told investors on Wednesday during the carrier's earnings
call. Passenger yield, a representation of the average price to fly one
mile, grew 16 percent in the quarter, compared
with the same period in 2009.
Bastian said the revenue
trends are showing no signs of letting up. "We're continuing to see demand
stay strong as we approach the end of the year," he said, adding that
October unit revenues are trending between 11 percent and 12 percent higher
than last year. "In light of the strength of demand, we're managing our
advance bookings with a keen sense on yield, leaving additional inventory
available for late, high-yielding traffic," Bastian said, later noting,
"We're certainly doing a lot more this year than last year, when demand
was off 25 percent."
Bastian said New York and other
business markets are leading the way in positive trends on the domestic side,
while transatlantic and transpacific trends also remain positive. "We're
seeing our international markets continue to have great strength," Bastian
said. "The Pacific mix of our business is one of the contributing factors
that's enabling some of the growth you're seeing. You're continuing to see a
lot of strength on the corporate side, coming out from the synergies of the
merger and being able to put the two networks together and have the new
corporate deals start to show up and realize significant benefits."
Also lifting the overall
revenue picture, Delta said "other revenue," representing ancillary
opportunities, increased $75 million, a 9 percent increase from the third
quarter of 2009, "due primarily to an increase in bag fees," Bastian
said.
Delta's third-quarter profit
followed a second-quarter profit of $467 million, and the carrier expects a similarly
successful fourth quarter, which would "represent our third profitable
quarter in a row and the first profitable December quarter since 2000,"
according to Delta senior vice president and CFO Hank Halter.