Delta Air To Benefit From Lower Fuel Costs, Expanded Capacity In FY15

(RTTNews) - Delta Air Lines Inc (DAL) said Thursday it expects pre-tax income in 2015 to increase 11 percent to $5 billion, hoping to benefit from expanded capacity and falling fuel prices, which has come as a boon for the airline industry faced with margin pressures.

Following the announcement, Delta shares gained more than 4 percent in morning trade on the New York Stock Exchange.

At an investor-day presentation, Delta said low fuel prices could lead to a benefit of $1.7 billion in 2015. The airline now expects its fuel prices in the range of $2.40 to $2.50 per gallon next year, down from the expected $2.63 to $2.68 per gallon for the December quarter. Lower fuel prices and increased air travel have benefited airline companies.

Also Delta said it estimates capacity to grow 2 percent in 2015, driven mainly by domestic growth.

Over the long term, Delta expects annual earnings-per-share growth of 10 to 15 percent.

In October, Delta reported a lower third-quarter profit, hurt by one-time costs and operating expenses, even as revenues climbed. However, earnings came in ahead of Wall Street estimates.

DAL is trading at $48.15, up $1.93 or 4.18%, on a volume of 5.6 million shares.