Delta Air Lines revenue rises 9.5%


Passengers sit in stations equipped with iPads ahead of their flights at a Delta terminal in LaGuardia Airport in New York June 22, 2014. Picture taken June 22, 2014. REUTERS/Adrees Latif

April 12 (Reuters) - U.S. carrier Delta Air Lines Inc reported a 9.5 percent rise in quarterly revenue on Thursday, boosted by higher average fares and passenger traffic.

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However, the Atlanta-based carrier's net income fell to $547 million in the first quarter ended March 31 from $561 million a year earlier. Higher costs, including a spike in fuel prices and a $44 million negative impact from severe winter storms, weighed on its bottom line.

Delta, the No. 2 U.S. airline by passenger traffic, reported earnings per share of 77 cents, topping Wall Street's average estimate of 73 cents per share, according to Thompson Reuters I/B/E/S.

Total operating revenue for the first quarter rose to $9.97 billion from $9.10 billion, and the carrier forecast total unit revenue - a key metric which compares sales with flight capacity - would increase 3 percent to 5 percent in the second quarter.

"We are seeing Delta's best revenue momentum since 2014, with positive domestic unit revenues, improvements in all our international entities, strong demand for corporate travel and double-digit increases in our loyalty revenues,” said Delta President Glen Hauenstein.

"We expect to maintain this momentum and deliver total revenue growth of 4 to 6 percent for the full year."

Looking forward to the second quarter, Delta said it expects improving costs and a reduction in the U.S. corporate tax rate to help mitigate the impact of soaring fuel prices.

The carrier forecast an increase in quarterly unit costs, excluding fuel and profit sharing, of between 1 percent and 3 percent as compared to the year prior.

In the March quarter, Delta said operating expenses had swelled by $817 million from the last quarter, driven primarily by increases in fuel and labor costs, and a higher depreciation expense.

Despite this increase, Delta said it is still on track to reach its target goal of flat to 2 percent growth in full year unit costs.

(Reporting by Alana Wise in New York and Arunima Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Chizu Nomiyama)

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