In a sign that at least one major airline is loosening its grip on capacity constraints, Delta Air Lines operating revenue improved 6%, or $474 million, in the fourth quarter as capacity ticked up 2.9%

Overall for the fourth quarter, Delta’s GAAP net income was basically flat at nearly $8.5 billion. This includes a one-time $8 billion non-cash gain that came with a reversal of the airline’s tax valuation allowance.

“With a solid demand environment, industry-wide capacity discipline and a number of Delta’s revenue initiatives already delivering benefits, we expect to produce significant margin expansion in the March quarter,” said Ed Bastian, Delta’s president. “As we move through the year, we expect to generate top-line revenue growth as we implement our Virgin Atlantic joint venture, continue to restructure and diversify our Pacific network, gain additional corporate share, and ramp up our merchandising efforts.”

Looking to guidance for the first quarter of 2014, Delta projects an operating margin of 6-8%.

Photo Credit: Delta Chief Executive Richard Anderson speaks during a news conference to announce the sale of Virgin Atlantic airline to Delta Air Lines, in New York December 11, 2012. Brendan McDermid / Reuters