Delta, US Airways Join Boeing in Profit Column
Airlines around the world are updating their fleets with new, more-fuel-efficient planes, and that helped Boeing post a 58 percent rise in profit for the first quarter on Wednesday.
The Chicago-based company said it earned $923 million, or $1.22 a share, in the first three months compared with $586 million, or 78 cents a share, a year earlier. Excluding a gain from settling litigation, it earned $1.11 per share.
Boeing delivered 137 commercial airplanes in the quarter, winning bragging rights over European rival Airbus, which had 131 deliveries. Much of the demand came from emerging markets, Chairman and CEO W. James McNerney Jr. said.
Meanwhile, Delta Air Lines and US Airways predicted higher demand heading into the busy summer travel season after fare increases helped them blunt rising fuel bills in the first quarter.
U.S. airlines have succeeded in raising fares three times this year.
Delta, the world's second-largest carrier, reported net income of $124 million, or 15 cents a share. However, it would have lost $39 million if it hadn't successfully hedged on its fuel. Delta's revenue rose 9% to $8.4 billion.
US Airways, the fifth-largest U.S. airline, earned $48 million, or 28 cents a share, for the quarter because of one-time gains. Not counting special items it would have lost $22 million, or 13 cents per share.
Even with higher fares, passenger traffic rose 4.7%.
"As we prepare for the busy summer travel period, we continue to be encouraged with the overall strength in passenger demand," said Doug Parker, US Airways CEO.
Parker also said Wednesday that he's trying to convince creditors of American Airlines of the virtues of a merger, although executives of American parent company AMR don't want one right now.
Last week, US Airways got unions at American to say they would support a merger. American is in bankruptcy court as it seeks to reorganize.
After US Airways gets the support of the full committee of American creditors, Parker said, "we would look forward to a cooperative and consensual process with AMR's board and management team."
A merger would generate $1.2 billion in cost savings and new revenue, although American's workers would make smaller concessions than AMR is demanding in its restructuring plan, US Airways President Scott Kirby said.
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