Delta Projects $5 Billion in Pretax Income Next Year

Delta Air Lines Inc. on Thursday projected its pretax income will jump 11% to $5 billion next year, as the airline expects to benefit from lower fuel prices and increasing capacity.

As part of its investor-day presentation, Delta said low fuel prices could result in a $1.7 billion benefit for the company next year. Delta expects its fuel prices to be between $2.40 and $2.50 a gallon next year, down from a projected $2.63 to $2.68 a gallon in its December quarter.

Delta said it expects its system capacity to grow 2% next year, driven by a 3% increase domestically. Its stake in Virgin Atlantic Airways Ltd., which gives Delta a strong position at London's Heathrow Airport, could also generate $200 million for Delta in 2015.

Delta, the third-largest U.S. airline by traffic, has posted strong passenger traffic recently on an improving domestic performance, especially in Atlanta and Seattle.

Five of the largest U.S. airlines reported soaring profits for the September quarter and said they expect similar success through the rest of this year, aided by falling fuel prices and continued strong demand for travel. These results dashed recent worries that the U.S. airline industry's turnaround was faltering.

For its part, Delta had reassured investors by reporting strong third-quarter results, excluding one-time items, and predicting a record fourth quarter.

In the long term, Delta is targeting 10% to 15% in annual per-share earnings growth. Analysts polled by Thomson Reuters project 29% growth in per-share earnings for next year.

Write to Chelsey Dulaney at [e-mail]

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