Delta’s 2014 net income excluding special items was $2.8 billion, a slight increase over a $2.7 billion net profit excluding special items in 2013. With fuel prices dropping significantly, Delta decided to make hedging adjustments and took a $1.2 billion fourth-quarter charge for mark-to-market adjustments on fuel hedges settling in future periods.
As a result, the Atlanta-based company incurred a $712 million net loss in the December quarter. Hedging meant Delta was unable to realize the benefits of a 14% year-over-year drop in the December quarter’s average price per fuel gallon to $2.62.
Delta’s fourth-quarter operating loss was $828 million, reversed from an operating profit of $701 million in the 2013 December quarter.
Delta’s full-year 2014 operating revenue was up 7% compared to 2013 to $40.36 billion, but expenses increased 11% to 38.15 billion as the airline’s fuel costs jumped 24% owing to $2 billion in charges related hedging. The carrier’s 2014 operating profit was $2.2 billion, down 35% from operating income of $3.4 billion in 2013.
With the fuel hedging adjustments made and Delta’s Trainer, Pennsylvania oil refinery earning a $105 million fourth-quarter net profit (reversing a $46 million net loss in the 2013 December quarter), Delta CFO Paul Jacobson said, “We expect a net year-over-year fuel price benefit of $500 million in the  March quarter and will work throughout 2015 to maximize the benefit of fuel savings to our bottom line.”
Delta’s 2014 consolidated traffic increased 4% year-over-year to 202.93 billion RPMs on 3% growth in capacity to 239.7 billion ASMs, producing a load factor 84.7%, up 0.9 point. Passenger yield rose 2% to 17.22 cents. The airline ended 2014 with 772 mainline aircraft in its fleet, 29 more than it had at the end of 2013.
(Aaron Karp - ATWOnline News)