Delta Air Lines, Inc. (NYSE:DAL) announced a new share buyback program worth $5 billion as it increases dividends.
The airline company elevated its quarterly dividends following the announcement. It expects shareholders to receive dividends worth more than $6 billion within the next two years. After the announcement, the company’s shares went up by 2.6% to settle at $47.30 per share before opening on Wednesday.
Delta increased its quarterly dividends from 9 cents per share to 13.5 cents. The payouts will be operational towards the end of the financial year in the third quarter. The company announced that it was in line with the schedule to pay off the remaining
At the end of the 2014 financial year, Richard who is Delta’s current Chief Executive announced that the company had plans to invest over $1.5 billion in dividends and buybacks in upcoming year which is 2015. The airline company is therefore living up to their initial plans.
In the second month of the first quarter, Delta shared out about $1.1 billion of its profits to its employees which was the biggest profit payout in the company’s history. The airline firm has plans to increase its operating margin by 16% by the year 2017. Additionally hopes that its activities will lead to an increase in the earnings per share with its current estimate of 15%. This is in line with its targeted growth percentiles which range from 10% to 15%.
Along with its plans for enhanced financial performance, Delta Air Lines, Inc. (NYSE:DAL) also has plans to make a few changes to improve the customer experience. Among them includes improvements to the customer service delivery and reduced prices. According to the company this will help increase the clientele and thus fill the planes with more passengers.
There might be a possibility of an upcoming merger according to projections made by analysts. It has however not been confirmed. The reduced oil prices have been an added advantage for the company in reducing its airline operational costs.
