VOL. 128 | NO. 207 | Wednesday, October 23, 2013
Delta Cuts More Memphis Flights
By JOSHUA FREED
MINNEAPOLIS (AP) – The same day Delta Air Lines announced its third-quarter earnings, word came down that the Atlanta-based airline will further decimate its Memphis presence.
Delta will cut 24 additional flights out of Memphis, leaving Memphis International Airport – a former hub for the passenger carrier – with just 40 flights. Before the 2008 Delta-Northwest merger, the two airlines flew around 240 flights a day here.
Delta also will cut 126 jobs at Memphis, which includes closing a local flight attendant base.
The staff and flight reductions came as Delta announced it made more than a billion dollars in the third quarter as more passengers paid a little bit extra to fly. Even its new oil refinery turned a small profit.
The airline is seeing strong holiday bookings, and the “revenue environment appears solid through the end of the year,” President Ed Bastian said in a statement.
Delta’s net income jumped 31 percent to $1.37 billion, or $1.59 per share. Not counting gains from fuel hedges, the company would have earned $1.2 billion, or $1.41 per share. That was 5 cents per share more than expected by analysts surveyed by FactSet.
A year ago it earned $1.05 billion, or $1.23 per share.
Revenue rose 6 percent to $10.49 billion, about what analysts were expecting.
Delta shares rose 4 percent, to $25.65, in premarket trading.
Traffic rose 2 percent for the quarter. The amount passengers paid for each seat flown one mile rose almost 5 percent. It said flying capacity would rise 1 percent to 3 percent in the fourth quarter. Delta is second only to United Airlines in passenger traffic among the world’s airlines.
Delta saw passenger revenue gains in domestic flying and flying to Europe. Revenue for flights across the Pacific fell 5 percent. The weaker Japanese yen has made Asia flying less profitable for Delta as well as United.
Last year Delta bought an oil refinery near Philadelphia, and has maximized its jet fuel output. It took longer than Delta had predicted, but the refinery turned its first profit in the most recent quarter, $3 million. It lost $136 million total during the three previous quarters. Delta said profits there were hurt by smaller spreads between the cost of crude oil and the selling price of fuel.
The same tighter margins reduced jet fuel prices for Delta, the airline said. Its cost for jet fuel fell 5 percent to $2.97 per gallon.
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