Tag Archives: Delta Airlines

Delta Announces Best Year Ever

Photo courtesy of TJDarmstadt

Things really took off for Delta Airlines in 2019. The fourth quarter of last year was one of record earnings, surpassing expectations. They also flew by their competitors to become the world’s biggest airline.

One component of Delta’s success was the unfortunate story of the grounded Boeing 737 Max fleets, which only affected Delta’s competitors, American, United and Southwest, never having purchased those suspicious airplanes. As a result, Delta could grab 7.5% revenue growth, partially due to better efficiency. One important airline metric, revenue per available seat mile (RASM) was up by 2.4%.

When Delta is high, so are its employees. The company is going to pay its 90,000 workers their highest ever profit-sharing bonus: $1.6 billion. That comes out to about 16.66% of each employee’s yearly salary, or about 2 months’ worth of pay.

“2019 was the best year in our history,” CEO Ed Bastian said. “These results simply would not be possible without the incredible work of our Delta team.”

The company was smart as well as lucky in 2019. Avoiding the Boing 737 Max could have been a combination of luck and smarts; while avoiding angry labor disputes was certainly smart. Having good weather at their hubs, of course, is simple luck.

Airlines Squeezing in Passengers as Costs Continue to Soar

As costs go up planes get crowded
As costs go up planes get crowded

Airlines today simply cannot afford to leave empty seats alone; as fuel costs and other expenses climb almost as quickly as a plane at take-off, airlines are being forced to push their load factors to the limits.

If you have felt that planes are becoming increasingly more crowded over the years, you are right. This past summer was one of the best summer seasons in airline history, with summer always being the busiest season for airlines. The US Airways Group stretched their load capacity up to a record 87.9 percent in August. This August record was just one more in a series of monthly records for load capacity for this airline. American Airlines, which is a proposed merger partner with US Airways, also had a load capacity record in May of 84 percent. Other airlines have similar figures: United Airlines hit 87.2 percent in July, and Delta soared to 87.3 percent in August.

Rising jet fuel prices are driving airlines to stuff in travelers. Over the past ten years the annual average load has climbed from 71.9 percent in 2002 to 82.8 percent in 2012. The increasing load capacity has not resulted in an increase in profits- the load capacity “break-even” point for US flights has gone from 69.4 percent in 2000 to a whopping 80.9 percent last year.

“One reason planes are fuller is because they have to be to avoid losing money,” says John Heimlich, chief economist at Airlines for America, the U.S. airlines’ trade group. “The airlines had to push really hard on the load-factor lever because they couldn’t push hard with the pricing.”