Delta Air Lines Inc. (DAL) lowered its outlook for first-quarter
passenger unit revenue amid increasing pressures from a strong U.S.
dollar on its international business.
The Atlanta-based carrier said passenger unit revenue, a key
measure of performance for the airline sector, is expected to
decline 1.5% for the quarter, mostly on currency impacts and as its
domestic business didn't strengthen in March to the extent it
expected.
The company previously projected a decline of roughly 1%.
Delta, the third-largest U.S. airline by traffic, said March
passenger unit revenue was unchanged from a year earlier as growth
of 2.5% in its domestic market offset pressures in its
international business, predominantly currency fluctuations that
cut passenger unit revenue by 1.5 percentage points.
The airline has been expanding its international presence
through investments in other airlines as well as code-sharing
agreements and partnerships. The company has a 49% stake in British
carrier Virgin Atlantic and has minority stakes in Grupo AeroMexico
SAB and Brazil's GOL Linhas Aereas Inteligentes SA.
Delta said its passenger traffic rose 2.5% last month. Capacity
grew 2.9%, and the portion of seats filled--or load factor--fell to
85% from 85.3%.
For the quarter ended March 31, the company forecast its
adjusted fuel price per gallon at $2.90 to $2.95, including hedges
and other adjustments.
In January, Delta said falling gas prices lifted its profits for
its fourth quarter and would continue to drive earnings this year.
Delta has said it expects to use an estimated $2 billion in fuel
savings this year to pay down debt and return cash to
shareholders.
The company expects to report its first-quarter results April
15.
--Chelsey Dulaney contributed to this article.
Write to Tess Stynes at tess.stynes@wsj.com
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