Delta lowers unit revenue forecast on last-minute U.S. business travel
(Reuters) - Delta Air Lines Inc (DAL.N) on Tuesday lowered its forecast for unit revenue this quarter as U.S. domestic business tickets booked near customer travel dates yielded less per mile than the carrier expected.
The Atlanta-based airline said it estimates passenger revenue per available seat mile, which measures sales relative to planes' carrying capacity and travel distance, to decline 4 percent to 5 percent this quarter compared to a year ago. It had previously forecast a drop of 2 percent to 4 percent.
"It should only get better from here," Sterne Agee CRT analyst Adam Hackel said, noting that Delta did not adjust its margin guidance despite the lower unit revenue.
Shares fell 2.5 percent as the news stoked investor fears about the outlook for the U.S. airline industry. U.S. airline stocks sold off last month after Southwest Airlines Co (LUV.N) forecast up to 8 percent capacity growth for 2015 and its competitors vowed to stand their ground, despite the possibility of lower fares and revenue.
The new guidance puts Delta in line with peers American Airlines Group Inc (AAL.O) and United Continental Holdings Inc (UAL.N), both of which expect a passenger unit revenue drop of 4 percent to 6 percent this quarter.
Delta said passenger unit revenue fell 5 percent in May on year-over-year basis.
(Reporting By Jeffrey Dastin in Los Angeles; Editing by W Simon and Paul Simao)
