Delta Airlines expects its profit to increase in 2013 and plans to return cash to shareholders.
Delta Airlines, Inc. (NYSE:DAL) expects achieve an increase in earnings in 2013 to $1.6 billion and announced its plan to return cash to shareholders during a webcast investor meeting on Wednesday.
Richard Anderson, chief executive officer of Delta Airlines, Inc. (NYSE:DAL), made the announcement. The company also expects its fourth quarter profit to increase from $200 million to $250 million excluding items, despite the damages caused by hurricane Sandy in the northeast last October. Delta Airlines, Inc. (NYSE:DAL) is the second largest airline company in the United States, and it cancelled thousands of flights during the superstorm.
The company will release its capital deployment strategy next year. Anderson predicted that AMR Corporation (PINK:AAMRQ)’s American Airline and US Airways Group, Inc. (NYSE:LCC) will possibly reach a merger agreement soon.
The airlines industry in the United States implemented several measures to increase revenue, including increasing ticket prices, baggage, and food fees amid rising fuel costs. The carriers also stopped their flights to unprofitable routes.
On Tuesday, Delta Airlines, Inc (NYSE:DAL) announced its strategic partnership with Virgin Atlantic to expand its trans-Atlantic network. Under the agreement, Delta will acquire a 49 percent stake in Virgin Atlantic for $360 million. Delta will have three seats on the board of Virgin Atlantic. Both carriers will operate 31-peak day round trip flights between the United Kingdom and North America.
In a statement, Anderson said, “Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the U.K., particularly on the New York-London route, which is the largest airline route between the U.S. and Europe.”
The transaction is subject to an antitrust review from the United States Department of Transportation and the Department of Justice, as well as approvals from the European Union competition regulators and other authorities.