Despite looming global economic concerns, Delta Air Lines
projects corporate demand will strengthen year over year in 2016, executives
said during the carrier’s fourth-quarter earnings call.
Corporate demand increased 3 percent year over year during
the fourth quarter, although it declined in Europe after the Paris terrorist
attacks, Delta president Ed Bastian said. Executives also said load factor, in
terms of advance bookings, is running ahead of expectations through early
summer. “Corporates continue to tell us they expect growth in 2016 over 2015
levels,” Bastian said. “There’s pricing pressure out there, with fuel prices
half of what they were a year ago, but business looks pretty healthy.”
Even so, Delta plans to adjust capacity this year to “reduce
exposure in some international regions,” he said. For the full-year 2016, Delta
projects domestic capacity will rise between 1 percent and 3 percent and total
capacity will either maintain or increase as much as 2 percent.
During the fourth quarter of 2015, total passenger revenue
declined 1.3 percent year over year to $8.1 billion. Foreign currency pressure
led to that decline, according to Delta.
Traffic across Delta’s network increased 3 percent, and
capacity was flat, bumping load factor up 2.4 percentage points to 85.2
percent. Passenger revenue per available seat mile declined 2 percent, and
yield declined 4 percent.
Delta reported a net income of $980 million for the quarter
and $4.5 per billion for 2015, compared with $659 million in 2014. Fuel costs
for the full year decreased 44 percent, contributing to a 14 percent decline in
total operating expense during 2015.