Delta Air signals improvement in unit revenue trends

(Reuters) -Delta Air Lines on Thursday signaled an improvement in third-quarter unit revenue trends on the back of strong travel demand and moderating capacity across the industry.

Airlines are trimming capacity after a rush to cash in on strong summer travel led to overcapacity and forced them to offer tickets on discount.

Delta said in July pricing power will improve from August as all major airlines moderate their capacity expansion plans.

The airline now expects positive unit revenue growth in domestic and transatlantic routes in September.

Delta also projected third-quarter profit per share to be at the top end of its previous forecast range of $1.70 to $2.00, excluding the 45 cents per share impact related to a global cyber outage in July.

It expects its 2024 earnings per share to be at or above the mid-point of its previous forecast of $6 to $7, excluding the impact from outage-related cancellations.

A software update in July by global cybersecurity firm CrowdStrike (NASDAQ:CRWD ) triggered system problems for Microsoft (NASDAQ:MSFT ) customers, including many airlines.

Atlanta-based Delta canceled about 7,000 flights over five days as the disruptions persisted at the carrier even as they eased at peers. The airline is facing an investigation from the U.S. Transportation Department for the disruptions.

The carrier had said it expects the outage, which disrupted travel plans of 1.3 million customers, would cost it at least $500 million.



As a result of the disruptions, the airline lowered its expectations for current-quarter revenue to a range of flat to up 1%, compared with 2% to 4% growth projected earlier.

Shares of the company were down 2% in choppy trade.

Source: Investing.com