Delta profit tops view, plans to curb flight capacity

Delta Thursday said it will add fewer seats for purchase than usual in early 2017 to prop up fares, reacting to a deluge of flights from rivals that is squeezing its profit margins. Delta said income fell about 4% to $1.3b in Q3. That nonetheless topped what analysts expected per share on an adjusted basis. While plummeting fuel costs led to a blockbuster rise in US airline profits since 2014, oil prices have to a degree plateaued and no longer are a force to improve the sector's results. At issue now is lower revenue. Budget carriers like Norwegian Air Shuttle ASA are fighting larger airlines over a fixed number of travellers and charging less per ticket. Delta said it expects its operating profit margin, excluding items, to shrink to between 14 and 16% in Q4 from 17.1% a year earlier. If pilots approve a union-negotiated contract, analysts said the margin will be lower still. In addition, Q3 was "the weakest revenue environment in recent memory," CEO Ed Bastian said. Trans-Atlantic flights earned less than expected because attacks in Europe discouraged would-be vacationers, Delta's President Glen Hauenstein said. Norwegian also began flights from New York to Paris, a hub city for Delta's partner Air France KLM SA, increasing competition for price-sensitive customers.<br/>