Delta Airlines Executive Summary

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As airlines prepare to report fourth quarter earnings next week, the industry is a position to report record profits. Even in a highly competitive industry, airlines have remained competitive thanks in large part to plunging oil prices. Recently, airlines made headlines when three of the largest U.S. airlines announced they would hike prices for the first time in 6 months.

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On Tuesday, Delta will be the first airline to report fourth quarter earnings. After impressing shareholders in Q3 2015, Delta is poised for a repeat performance come this Tuesday. With oil prices expected to remain weak for the foreseeable future, Delta should continue to experience strong revenue growth in the short term. The Estimize consensus calls for EPS of $1.22 and revenue of $9.586 billion, with EPS estimates slightly higher than the Wall Street consensus. Compared to Q4 2014, this represents a 56% increase in EPS and flat revenue growth. The massive savings from fuel costs has been a huge blessing which represents a massive portion of the airline’s operating …show more content…
Thanks to volatile oil, Delta posted a record Q3 and is expected to continue their upward trend. Besides oil, Delta is taking on new initiatives to boost revenue and differentiate itself in a concentrated market. The airline aims to invest $2 to $3 billion per year to improve customer satisfaction and convenience. This includes enhancing services both in the air and on the ground including improving fleet structure, amenities, products and on board technology. Even though airline traffic and revenue has improved, Delta has been negatively impacted by currency headwinds and diminishing per unit passenger revenue. This comes as passengers are spending less on baggage fees and onboard amenities per mile traveled. That being said, Delta and the airline industry can continue to be favorably until the oil market

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