DL sees 12-14% oper marg, $250M profit sharing for quarter

[WorldTraveler]

In an SEC filing yesterday, DL provided its monthly financial and operating report and also provided investor guidance for the quarter.

DL expects a very healthy 12-14% operating margin and has booked $250M in profit sharing which combined with what has been booked already this year would put DL's profit sharing for just the first 3 quarters above what DL accrued for all of 2012.

Just to compare size and scope, DL's profit sharing for the first 9 months of 2013 is larger than Alaska Airline's net profit in the past year.

DL also reported a 99.9% completion factor for September, a 90% on-time, and a RASM increase for Sept. of 5.5% on 1.7% additional capacity. DL notes that pressure from the yen devaluation decreased in Sept. but still contributed to a 1% reduction in RASM growth. DL indicated that yield growth in the transatlantic and domestic entities were particularly strong.

 

[robbedagain]

not soo sure you can truly compare as to dl given the size differences as is a small niche airline compared to dl and ua
i know that us' sept key rev was up pretty good... id imagine they will report a pretty solid 3rd qrtr profits

 

[WorldTraveler]

It is precisely because DL is so much larger than AS that they really are not in the same league. DL's much larger size and profitability does provides plenty of evidence to support DL's ability to accomplish what it needs to do on the west coast, even in AS' backyard based on the escalating feud between AS and DL that now has AS adding a bunch of capacity in many of the same markets that DL has increased from SEA. The same is true regardless of the region or strategy under discussion. AS will hurt itself far more than it will hurt DL.

Profits are what fuel the ability of companies to achieve their goals, whether it be network and product related or with regard to HR and investor issues.

With analysts expecting DL's profits to be at or near $2B this year, then DL is very well positioned to do what it needs to do to continue running a very strong and growing business.

And yes, US showed strong RASM growth, slightly ahead of DL's which isn't surprising since DL said its financial strength for the quarter came from the Atlantic and domestic markets which US competes with DL in while not competing in the Japanese market where DL says yen weakness hurt their results.