Delta Keeps Summer Capacity Stable--Update
10 April 2019 - 9:45PM
Dow Jones News
By Doug Cameron and Kimberly Chin
Delta Air Lines Inc. said Wednesday it would keep capacity
stable into the key summer travel season in a move that will help
allay investor fears that carriers are adding too much flying and
depressing leisure fares.
The nation's third-largest carrier by traffic expects to boost
capacity by 4% to 5% in the second quarter while keeping its
closely watched average revenue climbing in a band of 1.5% to
3.5%.
While the grounding of the Boeing Co. 737 Max has artificially
reduced the rate of expansion by U.S. carriers, more flights are
being added and only solid business-class demand has counteracted
weakness in leisure markets, particularly on some coast-to-coast
routes and to and from the Caribbean, two Delta strongholds.
Still, Delta reported quarterly profits at the top end of
analysts expectations, reset after an investor update last week,
and second quarter guidance was also in line, lifted in part by the
benefit of a new credit-card deal with American Express Co.
Delta reported a 28% rise in profits for the quarter to March
31. Costs excluding fuel dipped slightly.
The results reflect a departure from Delta's counterparts as
service disruptions and flight cancellations from the government
shutdown and the grounding of Boeing Co. 737 MAX 8 from fleets have
weighed on how much airlines can make for each seat flown.
On Tuesday, American Airlines Group Inc. cut its unit-revenue
guidance for the first quarter, and reported it had roughly 3,000
flight cancellations over the past three months. Southwest Airlines
Co., the biggest carrier of domestic passengers, also cut its
forecast as it digested almost 10,000 flight cancellations due to
bad weather, unplanned aircraft maintenance and the grounding of
737 MAX aircraft.
Delta is the first of the major airlines to report earnings,
kicking off the quarterly reporting season. Shares of Delta rose
almost 3% in premarket trading.
Adjusted net income for the Atlanta-based company totaled $639
million, or 96 cents a share, compared with $529 million, or 75
cents a share, a year earlier, ahead of the 90 cents a share
analysts estimated, according to a FactSet poll.
Write to Doug Cameron at doug.cameron@wsj.com and Kimberly Chin
at kimberly.chin@wsj.com
(END) Dow Jones Newswires
April 10, 2019 07:30 ET (11:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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