Delta Air Lines Inc. expects the improving revenue environment to continue in the months ahead, though sales of premium seats remain pressured.
Chief Financial Officer Hank Halter told investors at a conference in New York Wednesday that Delta's revenue per available seat mile likely will show growth at some point in the first half of 2010. He said the rate of decline has been slowing.
Analysts are watching airlines' revenue projections carefully as an indicator of when the economic recovery may gain steam.
The world's biggest airline has significantly reduced the amount of debt coming due next year and has minimal capital spending planned.
Delta is not planning a major overhaul of the aircraft in its fleet. Halter's comments came after United Airlines said Tuesday it is ordering 50 new airplanes.
Delta owns or leases 1,001 aircraft, according to its Web site. The figure excludes some grounded aircraft and aircraft operated by third-party contract carriers.
Halter said at the Next Generation Equity Research U.S. Airline Conference that Delta expects to end 2009 with $5.1 billion in unrestricted liquidity.
Delta's goals for 2010 are to continue to leverage opportunities with its alliance partners and to boost revenue, Halter said. Ancillary revenue, which includes fees generated from charging passengers to check bags and for other services, is a key for the airline, he said.
Delta generates about $4 billion a year in ancillary revenue. Halter did not announce any new fees, but he said passenger fees will not go away.
"Our passengers have actually expressed a willingness for that," he said.
Delta, meanwhile, is trying to lure Japan Airlines away from its partnership with American Airlines. Delta and its SkyTeam partners have a $1 billion offer on the table to bring in JAL into the alliance.
American has vowed to lead a $1.1 billion investment in the struggling carrier to prevent it from falling into the orbit of rival Delta.
Demand for air travel has been under intense pressure from the global economic slowdown, but U.S. carriers that compete internationally believe it will be important to have a strong presence overseas when things rebound. Airlines can reap a premium for long-haul seats, particularly in business and first class.
JAL expects to make a decision within the next few weeks.
Halter on Wednesday did not address the status of talks, but he said Delta is eager to grow its international service once the economic rebound gains steam.