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New Dawn for Delta

Airline says its quarterly profit quadrupled. 

That long trip through bankruptcy appears to have worked out for Delta Air Lines.

In its first quarter since emerging from Chapter 11 bankruptcy protection last spring, the airline earned $220 million, or 56 cents per share, more than quadruple what it earned in the quarter a year earlier. Operating revenue rose 10 percent, to $5.2 billion. The results were significantly higher than Wall Street's forecasts.

"As these results demonstrate, Delta has emerged as a leader in the airline industry, and we intend to maintain that position," said Richard Anderson, Delta's new chief executive.

The gains were bolstered by international flights. The airline said that 35 percent of its capacity is now operating in international markets, up from 24 percent in September 2005.

But the main driver of the turnaround at Delta was its 19-month stint in bankruptcy, when the airline cut costs and thousands of jobs and shed some $13 billion in debt.

The cost-cutting was reflected in the company's improved operating margin, which rose to 8.7 percent in the quarter, up more than five points from the year-ago quarter.

The question is whether Delta can keep the momentum going. With crude oil prices now more than $86 a barrel, rising jet-fuel prices could erase those hard-won gains. And with a blowout quarter behind it, Delta's workforce may start demanding to share more of the rewards after enduring bankruptcy.


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