Boston, MA 05/16/2014 (wallstreetpr) – Airline company, Delta Air lines, Inc. (NYSE:DAL) announced its plan of rewarding shareholders in the next two and half years by way of increased dividend as well as buying back of shares. The company intends to use its strong cash generation for these purposes.
Dividend Increase
As part of its program to return cash to the shareholders, the company’s board of directors has recommended an increase in quarterly dividend rate to 9 cents a share from its existing 6 cents a share. This will start from September 2014 quarter.
Delta Air lines, Inc. (NYSE:DAL) indicated that the dividend hike is part of its program to return a significant amount to its shareholders.
Share Repurchase
Delta Airlines disclosed that its board had also given its nod for a new share buy back program worth $2 billion. The share repurchase program is intended to be completed before the end of December 2016. Both the dividend and the share buy back program are estimated a return of an additional $2.75 billion worth of money to its shareholders in the next two and half years time.
Reduction of Debt
The company’s debt stood at $9.1 billion at the end of March quarter. This is $2.6 billion lower than the value existed at the end of the year 2012 and close to $8 billion lower than after it commenced its debt reduction program in 2009. Delta Air lines, Inc. (NYSE:DAL) sees opportunity to cut down its adjusted net debt to $7 billion by 2015, which means two years before its original schedule of reaching the target. The company also intends further to reduce it by $5 billion before the end of 2016.
CEO Speaks
The company’s chairman Daniel Carp said that it has deployed a strong cash flow to an increased value for its shareholders by reducing debt as well as pension that could provide strength to its balance sheet. He also felt that the latest efforts indicate Delta Air lines, Inc. (NYSE:DAL)’s confidence in its ability to not only sustain, but also improve its robust finance performance.
