ATLANTA (Reuters) - Delta Air Lines Inc
said Tuesday it expected higher unit revenue for the third
quarter as travel demand continues to show signs of rebounding,
and its shares rose more than 5 percent.
The world's biggest airline said in a federal filing that
it expected passenger revenue per available seat mile, an
important measure, to rise 15 percent for the quarter. In the
2009 third quarter, that metric declined 18 percent amid lower
international and corporate demand.
"Things are getting better," said Morningstar analyst
Basili Alukos, who added that Delta and other airlines have
reduced their costs.
Atlanta-based Delta also projected operating margin,
excluding profit-sharing expenses, of 12 percent to 13 percent
for the quarter. That compares with its estimate of as much as
12 percent forecast in July for the third period and operating
margin of 11.4 percent reported for the second quarter, when
savings from the 2008 acquisition of Northwest Airlines partly
offset profit sharing and other costs.
The forecast unit revenue growth "suggests that demand --
particularly in September -- is tracking better than expected,"
JP Morgan analyst Jamie Baker said in a note to clients.
Some analysts raised their profit estimates for Delta for
the third quarter. Analysts on average expect 90 cents a share
for the period, compared with profit of 6 cents a share for the
year earlier, according to Thomson Reuters I/B/E/S.
At Delta, load factor, or the percentage of seats filled,
is seen at 83 percent for September and 86 percent for the
third quarter, consistent with a year earlier, the carrier
added in its Securities and Exchange Commission filing.
Airlines are beginning to recover after two years of
decreased travel demand. Capacity cuts have allowed carriers to
trim costs and lift air fares.
Delta also said it expected special items in the third
quarter tied to merger expenses and costs to reduce the size of
the airplane fleet at its Comair regional subsidiary
Delta shares were up 4.8 percent to $11.18 in afternoon New
York Stock Exchange trading. Other airline stocks were also up
and the Arca Airline index gained 1.7 percent.
(Reporting by Karen Jacobs; additional reporting by Deepa
Seetharaman in New York and Kyle Peterson in Chicago; editing
by Lisa Von Ahn, Dave Zimmerman and Andre Grenon)