Key Takeaways
Delta kicked off Q4 2015 earnings for the airlines on a sour note yesterday morning, missing expectations on both the top and bottom-line. The Estimize community had been anticipating a $25M miss on revenues, but the actual came in $100M lower than that. As expected, the airline blamed foreign currency pressures, which impacted operating revenues by $160M, and reduced passenger unit revenue by 2 percentage points. Despite efforts to hedge currency headwinds by limiting certain international routes and bulking up on domestic ones, Delta still couldn't hit the mark.
Airline results come on the heels of an industry wide fare hike. On January 5, five major airlines including American, Delta, JetBlue, Southwest and United all announced they were raising one-way u.s. domestic flight prices by $3. The news came at an uncertain time for the industry which is currently under investigation by the US Justice Department for potentially conspiring to keep fares artificially inflated by limiting the volume of flights.