Delta Air Lines, Inc. Q2 Earnings: Profit Growth Returns
For more than two years, Delta Air Lines (NYSE: DAL) tried without success to get its unit revenue growing again, after the 2014-2016 oil price crash sparked a price war among U.S. airlines. However, it finally succeeded last quarter, driven by a combination of improving demand and easier year-over-year comparisons.
Delta's return to unit revenue growth also allowed the company to break a streak of margin declines that had stretched for several quarters. Furthermore, the revenue outlook is solid for the foreseeable future. As a result, Delta Air Lines may have just begun a new streak of margin expansion and profit growth.
During the second quarter, Delta Air Lines continued holding down capacity growth to foster a better supply-and-demand balance. This strategy worked. Delta increased capacity just 0.4% year over year, but revenue still increased 3.3%, thanks to a 2.5% increase in passenger revenue per available seat mile (PRASM).
Source: Fool.com
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