Delta Air Lines Inc. on Thursday projected its pretax income
will jump 11% to $5 billion next year, as the airline expects to
benefit from lower fuel prices and increasing capacity.
As part of its investor-day presentation, Delta said low fuel
prices could result in a $1.7 billion benefit for the company next
year. Delta expects its fuel prices to be between $2.40 and $2.50 a
gallon next year, down from a projected $2.63 to $2.68 a gallon in
its December quarter.
Delta said it expects its system capacity to grow 2% next year,
driven by a 3% increase domestically. Its stake in Virgin Atlantic
Airways Ltd., which gives Delta a strong position at London's
Heathrow Airport, could also generate $200 million for Delta in
2015.
Delta, the third-largest U.S. airline by traffic, has posted
strong passenger traffic recently on an improving domestic
performance, especially in Atlanta and Seattle.
Five of the largest U.S. airlines reported soaring profits for
the September quarter and said they expect similar success through
the rest of this year, aided by falling fuel prices and continued
strong demand for travel. These results dashed recent worries that
the U.S. airline industry's turnaround was faltering.
For its part, Delta had reassured investors by reporting strong
third-quarter results, excluding one-time items, and predicting a
record fourth quarter.
In the long term, Delta is targeting 10% to 15% in annual
per-share earnings growth. Analysts polled by Thomson Reuters
project 29% growth in per-share earnings for next year.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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