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Declining fuel costs makes for bigger profit at Delta

Delta is navigating some financial challenges but benefiting big from cheap fuel prices.

January 19, 2016

Despite the cheapest fuel bills in nearly 10 years, which will save Delta Air Lines more than $3 billion this year alone, some other issues are putting a cramp in the airlines financial expectations.

Fuel per gallon is costing about $1.20 in the first quarter, a healthy dip from $1.85 at the end of last year. That’s the lowest since 2008, according to Bloomberg.

The insight comes from Delta'' recent earnings report, which revealed sales dipped 1.5 percent, hitting $9.5 billion, which is below analysts' projections of $9.6 billion. Yet Delta is soaring high regarding profit, hitting a record $926 million, which easily bests revenue of $649 million a year prior,

What'' not likely making the carrier happy is the impact of a volatile currency rate, which led to a 2-point foreign-currency decline. Then there's the 2 to 2.5 percent drop in passenger unit revenue. Yet Delta's chief clearly sees positives on the horizon.

"As we look ahead to 2016, we have a significant opportunity to improve our performance even further," said CEO Richard Anderson during the earnings conference, according to the Wall Street Journal.

According to CNN,the airline's stock has dropped 12 percent this year.