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Delta's fourth-quarter net income surges $221 million

By control on January 26, 2012

Freight revenue for Delta Airlines improved 8 percent, year-over-year, in the fourth quarter of 2011, rising by $20 million to $256 million. This cargo increase is incorporated into the U.S. carrier’s impressive total net income for the quarter, which surged $221 million, year-over-year, to $379 million.

From an annual perspective, Delta’s freight numbers were considerably higher. Operating revenue for the carrier’s freight business rose 21 percent, year-over-year, in 2011, reaching $1 billion.

Sky-high fuel prices partially offset these gains, however. According to a press release, Delta paid $515 million more for fuel in the fourth quarter of 2011 than it did in 2010, although settled fuel hedge gains of $150 million compensated for 29 percent of this cost.

Either way, Hank Halter, Delta’s chief financial officer, said increased fuel prices make the carrier’s fourth-quarter profit surge even more impressive. “Delta’s solid cost performance, in an environment of 25-percent higher market fuel prices, came as a result of our cost-reduction initiatives and benefits from our fuel hedging program,” he said in a statement.

“We are focused on total cost productivity, including fuel, and implementing the structural initiatives needed to return our non-fuel costs to our targeted level,” Halter continued.

Delta is also focused on reducing its adjusted total debt, according to the press release. The carrier’s adjusted net debt at the end of 2011 totaled $12.9 billion, a $4.1 billion improvement from 2009. According to the press release, the goal for this year is to whittle debt down to the $10 billion by 2013.

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