Delta Air Lines posted a record third-quarter profit of $1.3 billion — more than triple the year-earlier number — with the help of lower fuel costs.
But executives say revenue trends are also forcing the Atlanta carrier to make some course adjustments, including pending job cuts at its Atlanta headquarters.
Delta said Wednesday it is paring growth plans for the rest of this year and 2016 after being hit with a sudden dip in average passenger fares and overall revenue during the quarter ended Sept. 30.
Earlier this month the carrier said it plans to cut jobs among its 10,000 management and salaried workers in the next few months to boost productivity. Delta, which employs 80,000, hasn’t put a number on the cuts.
Still, Delta continued to reap huge dividends from the steep decline in crude oil prices this year. Jet fuel is typically an airline’s largest or second-largest expense.
Delta said its third-quarter fuel bill declined more than $1.1 billion, or by almost 40 percent, compared to a year ago.
Paul Jacobson, Delta’s chief financial officer, said fuel at current prices “will drive a $750 million benefit in the December quarter.”
“With volatile fuel prices and revenues under pressure,” Jacobson said in a statement, “we are using the current environment to evaluate and prune costs across all parts of the business, including our overhead functions, making sure we’re investing in the right parts of the airline and at levels we can sustain over time.”
Delta’s overall revenue was $11.1 billion during the quarter, down about 1 percent from a year earlier.
Delta executives said the airline won’t add any more capacity in the fourth quarter and growth plans will stay in the 0 to 2 percent range next year.
That’s a reversal from the third quarter, when the airline boosted flying by over 3 percent from a year earlier but encountered falling demand and lower average fares in most markets.
Delta particularly took hits in its overseas markets, where the strong dollar raised the cost of fares for foreign customers, and economic worries in China and Europe weakened ticket sales. In both regions, Delta’s unit passenger revenue, or the money from each passenger-mile flown, fell more than 9 percent.
Overall unit revenue fell almost 5 percent compared to a year ago.
