Japan Transportation: Airlines: Delta results read-across: Q3 EPS in line with consensus, passenger demand shows no visible slowdown

Goldman Sachs published a Japan Transportation sector report on Airlines, providing a read-across on Delta Air Lines' 3QFY12/26 results. Delta held its earnings call on October 9; 3Q adjusted EPS of US$1.72 missed FactSet consensus (US$1.77) but beat our preview estimate (US$1.55). Pacific route unit revenue rose 5% yoy, showing no major change from the prior quarter (+7% yoy) and remaining at a modest momentum. Management expressed the view that overall passenger demand continues to be favorable, and the lack of any visible slowdown even amid high fuel prices is viewed as positive. Company-wide 3Q adjusted EPS rose 1% yoy as higher fuel costs (+69% yoy) were offset by passenger and cargo revenue growth (+15% and +29%, respectively). The 4Q EPS guidance midpoint (US$1.15-1.65) is broadly in line with FactSet consensus (US$1.43), while full-year EPS guidance was lowered from US$6.50-7.50 to US$5.10-5.60 on higher jet fuel prices. For JAL and ANA, the near-term demand outlook remains rob