OREANDA-NEWS. Delta Air Lines (NYSE: DAL) reported a record-breaking fourth quarter Tuesday, with adjusted pre-tax income of $1.45 billion, up 42 percent from the previous year. Adjusted net income was $1.18 per diluted share. On a GAAP basis, pre-tax income was $1.53 billion and EPS was $1.25 for the quarter.

The quarter capped a historic year for the global airline, which reported full-year 2015 adjusted pre-tax income of $5.9 billion1, up 29 percent from 2014. Delta also announced it will pay $1.5 billion in profit sharing for the year to its 80,000 global employees next month – the largest profit-sharing payout in airline history. On a GAAP basis, pre-tax income was $7.2 billion for the year.

“Our 2015 performance was a record for Delta on all fronts – with industry-leading operational performance, superior customer satisfaction and a $5.9 billion adjusted pre-tax profit,” said Delta CEO Richard Anderson in a press release. “These results show the commitment of the Delta people to running the best airline in the world every day. It’s an honor to reward their performance with $1.5 billion in profit sharing this year.”

Delta customers enjoyed the benefits of the airline’s industry-leading operational excellence during the year, with a total of 161 days with zero mainline cancellations, and an on-time rate of 85.9 percent. And investors were rewarded with $2.6 billion in dividends and share repurchases in 2015, including $530 million during the December quarter, according to the report.

The financial results were driven in part by lower prices for jet fuel throughout 2015. During the fourth quarter, adjusted fuel expenses2 dropped by $726 million compared to the same period in 2014, and market fuel prices were down 30 percent.

“Rigorous cost discipline is a key part of the Delta culture, which was proven by our ability to keep non-fuel unit costs flat in 2015 while significantly investing in our people, products and services,” said Paul Jacobson, Delta’s chief financial officer, in a press release.

The airline reported that passenger unit revenues were down 1.6 percent for the quarter, including 2 percentage points of impact from foreign currency fluctuations. But network and commercial initiatives, including Delta’s Branded Fares, helped the airline maintain its unit revenue premium to the industry, said Delta President Ed Bastian.

“Looking ahead, the overall demand environment remains solid. The breadth of our network scale allows us to focus our commercial efforts on those areas of the business with the best opportunity such as the domestic marketplace, while reducing our exposure in some weaker international regions,” Bastian said.

Other highlights from Delta’s earnings report:

  • Delta generated $1.4 billion of adjusted operating cash flow and $300 million of free cash flow during the quarter, after reinvesting $1.1 billion back into the business. On a GAAP basis, operating cash flow was $1.5 billion.
  • The company repurchased 48 million shares of stock during 2015 at an average prices of $45.50 per share.
  • Adjusted net debt stood at $6.7 billion at the end of the quarter, a reduction of more than $10 billion since Delta launched its balance sheet improvement effort in 2009.

Delta, which has been consistently profitable on an annual basis since 2010, is the first major airline to report earnings for the fourth quarter of 2015. In coming weeks, American Airlines, United Airlines, Southwest Airlines, JetBlue Airways and Alaska Airlines will all report their results.  The industry overall is expected to post strong results for the quarter. 

“Our 2015 performance was a record for Delta on all fronts – with industry-leading operational performance, superior customer satisfaction, and a $5.9 billion adjusted pre-tax profit.” – CEO Richard Anderson