Delta announced a 2nd quarter profit of $467  million.  That’s not an annual profit.  That’s a quarterly result and an impressive one at that.  That is coming from the merger of Delta and Northwest that formed a $28 Billion a year company less than 2 years ago. It’s notable that both Delta and Northwest managed to restructure their costs through bankruptcy reorganization. 

American Airlines, a company with revenues of nearly $24 Billion, is not expected to earn a profit this year.  This disparity really highlights the disadvantage American Airlines has with respect to costs and its failure to contain and restructure those costs even during the last 2 years of crisis in the airline industry.

And this is why ‘Continental and United want to merge so badly.  It shows a pathway to greater profitability and that’s something that has to exist in this industry going forward.  In fact, I find that Delta result so impressive, I really wonder if it won’t make LCC’s start looking at each other as well.

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