Delta grew corporate revenue and made up ground on corporate airfares in 2018, though the ongoing government shutdown is dealing a blow to revenue this year.
In the carrier's fourth-quarter earnings call, Delta president Glen Hauenstein said corporate revenue increased 7 percent year over year in the fourth quarter, rising across all sectors. Revenue for premium products increased 10 percent. For the full year, corporate revenue rose 8 percent compared with 2017, and the average corporate fare increased 5 percent, returning to 2016 levels, he said.
Corporate demand remains strong for the airline, as 90 percent of corporate clients in a recent survey plan to maintain or increase spending this year, Hauenstein said. On-hand corporate bookings in January are up 7 percent year over year at this point, he said.
The government shutdown and the resulting reduction in government travel, however, stand to cost the carrier about $25 million this month. The halt on inspections also is slowing the delivery and start of some of Delta's new aircraft. Delta CEO Ed Bastian said the carrier is working with the Transportation Security Administration to provide Delta employees to help with "nonessential duties" to ease the workload amid the shutdown.
Passenger revenue in the fourth quarter increased 6.9 percent year over year to $9.65 billion and was up across all regions, most strongly for domestic flights (7.7 percent) and transatlantic flights (7.2 percent). Traffic rose 4 percent, and capacity increased 4.1 percent, keeping the load factor flat at 85.2 percent. Yield was up 2.8 percent year over year.
Delta reported a net income of $1.02 billion for the quarter, up from $299 million in the fourth quarter of 2017. For the full year, net income was $3.94 billion, up from $3.21 billion in 2017.
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