Delta Air Lines is the only major US carrier without a 737 Max in its fleet. And that justhelpedit to post very strong fourth quarter and full-year profits.
The Atlanta-based airline earned $4.8 billion in 2019, up 21% from a year ago, as the fourth quartereasily topped both its own guidance and Wall Street forecasts. Revenue rose 6% to $47 billion for the year, as the fourth quarter again beat forecasts.
Delta (DAL) shares rose 4% inearly afternoon trading following the earnings report.
“As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results,” said CEO Ed Bastian.
Delta has gained as rivals Southwest (LUV), United and American Airlines (AAL) have all been forced to trim their schedules due to the grounding of the Boeing 737 Max last March, following two fatal crashes overseas that killed 346 people. Boeing has yet to win approval for the planes to fly again, and airlines have canceled flights well into spring as a result.
Delta did not give any estimates for how much passenger revenue it believes it picked up due to other airlines’ problems with the Max. But Bastian did not dispute that the Max problems have helped Delta.
“We’ve clearly been a beneficiary, and as long as the Max stays out of the sky, I guess, we’ll continue to be one,” he told investors on a conference call Tuesday.
Delta said it expects revenue in the first quarter to be up between 5% and 7%,driven largely by higher passenger numbers rather than higher fares.
Bastian said he’s not trying to make any forecasts based on estimates of how long the Max will stay grounded.
“We’ve all been watching the Max story for the last year, and none of us have a very good crystal ball,” he said.
The good news for Delta translatesinto good news for its 90,000 employees, who will receive a record $1.6 billion in profit sharing bonuses, up about 23% from a year ago.
The profit sharing bonuses come to about two months of extra pay for eligible employees, according to figures from Delta.
