Delta's August Passenger Revenue Falls, Hurt by Computer Outage
September 02 2016 - 11:30AM
Dow Jones News
Delta Air Lines Inc. said a key metric that measures passenger
revenue fell 9.5% in August, hurt in part by the airliner's
computer problems during the month.
The No. 2 air carrier by traffic said the computer failure,
which resulted in 2,300 canceled flights over three days, hurt its
August revenue by about $100 million, representing 2 percentage
points of the decline in passenger-unit revenue.
Unit revenue is considered an important measure of performance
for the airline sector and represents the amount of money received
by Delta per seat flown a mile.
Unit revenue at U.S. airliners have been shrinking for more than
a year amid a price war in the industry. Many airlines took
advantage of lower oil prices by adding flights and seats, but they
overestimated demand. As a result, U.S. airlines have been caught
in a spiraling fare war.
Delta said its overall traffic in August fell 2.8%. Capacity
increased 0.5%, while load factor, or the percentage or seats
filled, declined to 84.4% from 87.3% a year earlier.
Delta's technical problems in August were caused by a
malfunction in the electrical system that powers computers at the
airliner's Atlanta headquarters. Company officials called the
failure a one-time event, but the outage raised questions about the
carrier's information technology.
In addition to the computer problems, Delta said it continued to
see pressure from domestic yield weakness, the continuing
supply-demand imbalance in the trans-Atlantic and headwinds from
its Yen hedge positions.
In comparison, Delta's unit revenue fell 7% in July and 4.9% in
the June quarter.
Write to George Stahl at george.stahl@wsj.com
(END) Dow Jones Newswires
September 02, 2016 11:15 ET (15:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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