(Reuters) - Delta Air Lines Inc announced a $5 billion share buyback and said it would raise its quarterly dividend as part of a plan to return more than $6 billion to shareholders through 2017.
Delta, whose shares were up 2.6 percent before the bell on Wednesday, said it would raise its quarterly dividend to 13.5 cents per share from 9 cents in the September quarter.
"Today's announcement marks the next phase of Delta's long-term capital deployment strategy as we near conclusion of our balance sheet transformation and place even greater emphasis on returning our free cash flow to shareholders," Chairman Daniel Carp said in a statement.
The company said it was on track to complete the remaining $725 million from its previous $2 billion buyback program by June 30, one and a half years ahead of schedule.
Chief Executive Richard Anderson said in December that Delta would invest a minimum of $1.5 billion in buybacks and dividends in 2015.
Delta said on Wednesday that it ended the first quarter with $7.4 billion of adjusted net debt, a decline of $2 billion from 2013. The company said it expected to achieve and maintain $4 billion of adjusted net debt by the end of 2017.
Delta plans to reinvest $2.5 billion-$3 billion annually for fleet, facilities, technology and product improvement, allowing for the replacement of 20 percent of its mainline fleet over the next three years.
Delta reported in April that its first-quarter profit rose nearly 250 percent to $746 million, mainly due to a 44 percent drop in fuel costs.
Up to Tuesday's close of $46.10, Delta's stock had fallen about 6 percent this year.
(Reporting by Rohit T. K. in Bengaluru; Editing by Savio D'Souza and Ted Kerr)
