Delta, US Air post good returns amid upturn in passenger traffic

Indicating an upturn in the US civil aviation market, the country's two major airlines, Delta Air Lines Inc and US Airways Group Inc today reported unexpectedly good results for the first quarter, traditionally the industry's weakest period, as they filled more seats on planes.

Delta said earnings excluding certain items were $85 million, or 10 cents a share. US Airways recorded a profit of $55 million, or 31 cents a share. The two airlines led an industry rally.

US Airways Group had, on 14 February, signed a merger deal with AMR Corp's American Airlines in an $11 billion all-stock deal, to create the world's biggest carrier.

Both carriers filled more than 81 per cent of their available seats, and they wrung out more revenue from each seat flown a mile (unit revenue), a benchmark gauge.

Delta hadn't reported a profit in the first three months of the year since 2000, chief financial officer Paul Jacobson said in a memo to employees.

Unit revenue rose 4.1 per cent at Delta and 2.4 per cent at US Airways last quarter. Delta said sales increased 1 per cent to $8.5 billion, while US Airways posted a 3.5 per cent gain to $3.38 billion.

Delta said unit revenue would drop 2 per cent to 3 per cent for April because of mandatory government budget cuts and a ''softening'' in leisure flying that carried over from late March.

US Airways expects April unit revenue to fall 3 to 4 per cent from a year earlier and to be unchanged to 2 per cent lower in May and June respectively, President Scott Kirby said on a conference call.

''Leisure demand is still good, and forward bookings are up year over year for May and the rest of the summer. Business demand remains volatile,'' Kirby said. ''As long as the sequester remains in place, we expect government demand to continue to remain depressed.''