Delta Air Lines posts 2019 profits

Delta Air Lines has posted full year 2019 adjusted earnings per share of $7.31, a 30% increase year over year. 

Delta’s total annual revenue increased to a record $47 billion, up 7.5% when prior year period is adjusted for third-party refinery sales and the sale of DGS. Premium product ticket revenue increased 9% along with strong double-digit percentage increases from loyalty and third-party maintenance revenue. Delta's operating revenue of $11.4 billion for the December quarter improved 7.2% or $768 million over the prior year (adjusted for the sale of DGS). This was driven by a 9% increase in premium product ticket revenue, an 18% increase in loyalty revenue and a 31% increase in third-party maintenance revenue, which was partially offset by 13% lower cargo revenue. 

Total expenses increased 3.9%, driven by higher revenue- and capacity-related expenses, profit sharing, and pension expense, which were partially offset by $501 million lower fuel cost. Fuel expense decreased 14% relative to December quarter 2018.  Delta's fuel price for the December quarter was $2.01 per gallon, including a $24 million benefit from the refinery.

"2019 was a truly outstanding year on all fronts – the best in Delta's history operationally, financially and for our customers.  Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success.  I'm pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019," said Ed Bastian, Delta's chief executive officer. "As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75."

For the full year, Delta generated $8.4 billion of operating cash flow and $4.2 billion of free cash flow.  Full year cash flow is net of $1 billion of voluntary pension contributions, including $500 million made in the December quarter.

In 2019, Delta took delivery of 88 new aircraft including the A220-100 and A330-900neos.

Also during the year, Delta completed a $1.5 billion unsecured debt offering through a mix of five- and 10-year notes at a blended rate of 3.24%, the lowest unsecured rates achieved by Delta for these lengths of maturity in its history. The proceeds from this offering were used to fund the acquisition of the 20% equity stake in LATAM Airlines Group.