It was something of a good-news-bad-news story for Delta Air Lines (NYSE:DAL) Thursday morning.
Strong travel demand, particularly from high-paying passengers, boosted the carrier’s revenue and profits in the third quarter, but costs rose as the airline ramped up flying.
Delta doesn’t fly the Boeing (NYSE:BA) 737 Max, which has been grounded since March after the second of two fatal crashes. Competitors like American (NASDAQ:AAL) and Southwest (NYSE: LUV) that have the 737 Max in their fleets canceled thousands of flights in the quarter without access to the planes.
As a result, CEO Ed Bastian declared, Delta picked up additional market share, which he expects the airline to hold onto.
As Delta increased flying, employee wages help drive up non-fuel costs by 2.4% in the three months ended Sept. 30.
Delta forecast per-share earnings of $1.20 to $1.50 in the fourth quarter, while analysts expected $1.51 a share. Delta said it expects its costs excluding fuel to rise as much as 5% in that period from a year ago. The airline increased wages for ground staff and flight attendants by 4% on Oct. 1.
Delta also said it plans to hire at least 12,000 employees, including flight attendants and pilots, through 2020.
Delta said Thursday its third-quarter revenue rose 5% from a year earlier to $12.56 billion, slightly below analysts’ forecasts. Net income rose more than 21% to $1.5 billion. Sales from its premium cabins, like first class, rose 9%.
Per-share earnings on an adjusted basis came in at $2.32, compared with analysts’ estimates of $2.26 a share.
Shares dropped $2.48, or 4.6%, to $51.44
