Delta Air Lines (NYSE: DAL) released its most recent earnings Oct. 10, which beat analyst estimates, and disclosed that its traffic climbed 6.8% globally and 8.3% domestically. Key metrics such as total revenue per available seat mile (TRASM), consolidated unit cost (CASM), passenger load factor, operating margin, and fuel expense all improved year-over-year for the quarter, which led to a 13.1% improvement in adjusted net profits.
Nonetheless, guidance for Q4 was weaker than anticipated, with non-fuel costs expected to rise 2% for the full year 2019, which is substantially higher than the previously forecast 1%. This news caused some trepidation for investors eyeing this cyclical industry that has experienced volatile operating results in the past. But it may have been an overreaction.
In many respects, Delta has been the darling of the airline industry. The company's passenger load factor-a key profit margin driver that measures how full its planes are-increased by 90 basis points to 86.5% for the first nine months of 2019. The improvement compares favorably to the 85.7% aggregate statistic for the industry.