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Delta Air Lines shares rose Thursday after the Atlanta-based carrier raised its profit forecast for the year following strong travel demand. Its CEO said the airline is also benefiting from the grounding of competitors’ Boeing 737 Max planes.
Delta said it expects to earn $6.75 to $7.25 per share this year, up from a previous estimate of $6 to $7 a share. Shares rose up more than 2% in premarket trading after it reported quarterly results.
Delta doesn’t operate the Boeing 737 Max, which has been grounded worldwide since mid-March following two fatal crashes that claimed a total of 346 lives.
“We do not fly the Max and clearly there was a benefit to the airline in the quarter,” Delta’s CEO Ed Bastian told CNBC’s Squawk Box on Thursday.
Competitors American, Southwest and United have canceled thousands of flights throughout the busy summer travel period and removed the 737 Max from their schedules through the end of the season as the plane remains grounded. Regulators have not indicated when they will allow the planes to fly again.
“It’s taken longer than any of us expected to see it return to service,” Bastian said. “We don’t have a crystal ball on that.”
Delta’s second-quarter profit rose about 30% from a year ago and topped analysts’ expectations, as strong demand, particularly for premium-class cabins and corporate travel drove its earnings higher.
Delta posted a per-share profit of $2.35, on an adjusted basis, on record revenue of $12.5 billion, which roughly in line with estimates. Higher revenue from premium cabins and corporate travel helped drive sales higher, the airline said. Net income rose to $1.4 billion from $1.04 billion in the April-June quarter of 2018.
Delta expects earnings per share of $2.10 to $2.40 in the third quarter. Analysts expected third-quarter per-share earnings of $2.18.
Delta’s executives hold a call with investors at 10 a.m. ET.