Delta Air Lines Inc.
) has announced $372 million in profit sharing with 80,000
employees as part of its effort towards recognizing employee
contribution for realizing operational goals in 2012. The
contribution will amount to a payout of 6.67% of each
individual's earnings in 2012.
For the past three years, Delta employees have earned about 1.1
billion in profit sharing and shared reward programs. In 2012,
Delta employees earned $463 million in performance pay that
reflects the company's healthy financial position.
We expect Delta, the second largest airline company in the U.S.
United Continental Holdings Inc.
) to remain profitable as it continues to reap benefits from the
investments made to improve operating efficiencies and customer
experience. In 2012, the company experienced higher revenues
compared to last year based on better service offering, capacity
discipline and customer-focused initiatives.
These trends are expected to continue in the coming months,
resulting in 4% to 6% year-over-year improvement in unit
revenues, with margin expansion of 2.5% to 4.5% for the March
quarter. On the operational front, Delta witnessed an on-time
arrival rate of 86.5%. Luggage missing dropped by 25% and
customer complaints were about 40% less.
The company is taking several initiatives to lower costs and is
targeting $1 billion of cost savings over the next few years.
Delta is leading the industry in managing fuel cost through fare
hikes and capacity cuts.
The company is planning cautiously to cut consolidated
capacity by 2-4% year over year in the first quarter, with 1-3%
reduction in domestic flying and 3-5% drop in international
flying. Delta Air Lines is involved in fuel hedging strategies,
which provide a cushion to the rising fuel prices.
DELTA AIR LINES (DAL): Free Stock Analysis
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UNITED CONT HLD (UAL): Free Stock Analysis
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With the target to reap in high revenues and earnings in 2013,
Delta is involved with various strategic actions that include
re-organization of fleet, introduction of attractive services,
capturing of new markets and profitable takeovers. The company is
collaborating with top brands like Malin+Goetz and
Tumi Holdings Inc.
) to offer travel luxuries to BusinessElite passengers.
We believe that these innovative and attractive initiatives along
with enhanced service offerings will position the company
advantageously compared to other industry players such as
JetBlue Airways Corp.
Delta currently holds a Zacks Rank #3 (Hold) rating.