Delta Air Lines Inc.’s fourth-quarter profit beat analysts’ estimates, boosted by cheap fuel and strong demand in the U.S.

The carrier benefited from a 39 percent reduction in oil prices during the period, even as its costly fuel hedging contracts limited gains. More passengers flying domestically also buoyed Atlanta-based Delta, helping offset pressure on international routes.

Delta is the first U.S. carrier to publish fourth-quarter earnings. Analysts estimate the six largest airlines will report a combined $2.7 billion in profits, excluding one-time items. That’s a 59 percent increase from what the industry earned at the end of 2013, according to data from the companies.

“As we begin 2015, we have a significant opportunity from lower fuel prices, which will drive more than $2 billion in fuel savings over 2014,” said Chief Executive Officer Richard Anderson.

Profit was 78 cents a share, Delta said in a statement today. That surpassed the average estimate of 77 cents a share by 18 analysts compiled by Bloomberg.

Delta said its operating margin is forecast to be 11 percent to 13 percent in the first quarter. It estimates a fuel price of $2.45 to $2.50.

Fuel is typically the largest expense for airlines, accounting for as much as one-third of total operating costs. The six largest U.S. carriers spent almost $32 billion on fuel during the first nine months of 2014, according to data from the companies.

Delta’s hedging contracts are expected to eat into the company’s profits this year. In December, Delta said its hedges would hurt full-year 2015 earnings by $1.2 billion. Some analysts believe the hedge losses will exceed that as fuel costs continue to slide. Wolfe Research analyst Hunter Keay on Jan. 15 said Delta may face a $1.8 billion hedge loss this year.

Delta’s shares rose 79 percent in 2014. The stock declined 6.8 percent this year through Jan. 16 to $45.84.

This article was written by Michael Sasso from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: In this Oct. 8, 2012 file photo, a Delta Air Lines airplane is parked at Seattle-Tacoma International Airport in Seattle. Ted S. Warren / Associated Press