US: Airlines tumble after Delta issues weak July revenue report

US airlines marked the second-sharpest decline on the Standard & Poor’s 500 Index, following a weak revenue report from Delta. Passenger revenue for each seat flown a mile fell 7% in July from a year earlier, the country’s second-largest carrier by traffic reported Tuesday. The Atlanta-based airline blamed bad bets on currency exchange, excess seat supply on trans-Atlantic flights and reduced prices for tickets booked shortly before travel. “The group is off on the fact that you’re probably going to have negative headlines on PRASM numbers for July, which should not have been a surprise,” said Stephens Inc. analyst Jack Atkins. Delta warned investors two weeks ago that revenue for each available seat mile could be weak. “Maybe there was some expectation that things strengthened in the back half of July. I was not assuming that.”<br/>Airlines’ so-called unit revenue has fallen for more than a year, in part because of heavy competition in certain US markets and an oversupply of seats in some regions overseas. Delta’s weak performance last month means it will need a sharp recovery in September to meet its outlook for this quarter, UBS Securities analyst Darryl Genovesi said. The company had forecast that unit revenue would fall 4 to 6% in the period and said it would trim capacity next month.<br/>