DALLAS - Delta Air Lines Inc. is making more money by filling more seats on its planes and paying a bit less for fuel.
Delta's first-quarter profit beat expectations and underscored how most big airlines are prospering with a combination of strong business travel, slightly higher fares and money from extra fees.
Even bad weather couldn't stop Delta from boosting profit, although it canceled more than 17,000 flights in January and February - double the number from a year ago - which cost the company $90 million in revenue and $55 million in pretax income.
Delta is Charleston's oldest carrier and its largest based on passneger volume.
Ed Bastian, president of the Atlanta-based airline, said Wednesday that Delta expects revenue to remain strong through the year thanks to solid demand. He said that a key statistic of revenue per mile should grow in the mid-single digits during the April-through-June second quarter.
Delta said that net income in the first quarter was $213 million, or 25 cents per share, up from $7 million, or a penny per share, a year earlier.
Excluding items such as fleet-restructuring costs and fuel-hedging, Delta earned 33 cents per share. Analysts, who usually exclude one-time costs and benefits like that, were expecting 29 cents per share, according to FactSet.
Revenue rose 5 percent to $8.92 billion, matching analysts' forecasts.
Passengers flew 4 percent more miles than in early 2013, which helped boost occupancy to 82.7 percent on the average flight, up from 81.2 percent a year ago. The average fare per mile rose 1 percent.
Including Delta Connection regional flights, the company spent $2.70 billion on fuel, its largest expense in the quarter. Still, that was a savings of $109 million, or 4 percent, as Delta paid $3.03 per gallon instead of last year's $3.24. The company expects total fuel costs of $2.97 to $3.02 per gallon in the second quarter.
The break on fuel spending more than offset an increase of $58 million, or 3 percent, in labor costs, the company's second-biggest expense at $1.97 billion.
As long as travel demand holds up, Delta should be able to cover those costs.
The company overcame severe winter weather and the shift of Easter travel into April.
"We see continued revenue strength as we move through the year from corporate revenue gains, the benefits of the Virgin Atlantic joint venture and improved ancillary revenues," Bastian said.
Ancillary revenues include fees for checking bags, changing reservations, getting an economy seat with more legroom, and other perks.
Helane Becker, an analyst with Cowen and Co., said Delta was aggressively controlling costs other than fuel and said the company's outlook for the second quarter was stronger than expected.
The financial strength of U.S. airlines has increased as mergers have reduced competition and made it easier for the carriers to control the supply of seats. Later this week, American Airlines and Southwest Airlines are expected to report that their first-quarter profits also rose sharply from last year. Among the largest four U.S. airline companies, only United Continental Holdings Inc. is expected to report a loss.
Notice about comments: