DAL Delta Air Lines Inc

Delta Air Lines Inc. on Thursday said it has decided to reduce its U.S.-U.K. capacity on its winter schedule because of additional foreign currency headwinds from the steep drop in the British pound and the economic uncertainty from Brexit.

The No. 2 air carrier by traffic announced the reduction with its results for the June quarter. In the quarter, earnings rose a better-than-expected 4.1%, but revenue fell more than analysts anticipated.

Delta's plan to reduce its U.S.-U.K. capacity by six percentage points will, among other things, reduce total system capacity by about one point in the December quarter, and the company now expects system capacity to grow by just 1% year-over-year during the period.

The company said that while the revenue environment "remains challenging, with persistent headwinds from close-in domestic yields and geopolitical uncertainty," it remains focused on achieving its goal of positive unit revenue by year end. Passenger unit revenue measures how much money airlines take in for each passenger flown a mile.

Delta expects passenger unit revenue to fall in the current quarter after the key industry benchmark fell more than anticipated in the most recent quarter. In the recently completed second quarter, passenger unit revenue dropped 4.9%; the airline had anticipated a 2.5% to 4.5% decline.

For the third quarter, the company expects passenger unit revenue to fall 4% to 6%.

Over all for the second quarter, Delta reported a profit of $1.55 billion, or $2.03 a share, up from $1.49 billion, or $1.83, a year earlier. Excluding certain items, earnings rose to $1.47 a share from $1.27 in the year-earlier quarter and above analyst estimates for $1.45.

Revenue slipped 2.4% to $10.45 billion, below analysts estimates for $10.49 billion. The top line was dented $65 million by foreign currency headwinds.

Shares in the company, which have fallen 22% this year, slid another 1% premarket to $39.15.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

July 14, 2016 08:35 ET (12:35 GMT)

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