Delta’s Q3 outlook falls short of expectations
US investors were left disappointed on Thursday after Delta, the country’s largest carrier by market value, issued Q3 guidance that fell short of expectations. The company said passenger revenue per available seat mile (PRASM) is expected to increase by only between 2.5 and 4.5% for the September quarter, confounding analysts’ expectations for a gain of as much as 5%. Costs meanwhile, as measured by available seat mile including profit sharing — are projected to rise 4%. The weaker-than-expected outlook comes despite the renewed drop in oil prices, which should result in lower jet fuel costs for airlines. It also contrasts with the rosier outlooks provided this week by rivals America Airlines and United Continental. After reaping the benefits of lower fuel prices for the past few years, airlines had endured a rough 2016 as a rebound in crude prices and new labour agreements added to their cost bases and they engaged in an aggressive fare battle. But shares have taken flight again since April, with the stock of many carriers trading at near record highs on signs that they are regaining pricing power. Delta issued its Q3 outlook alongside its results for Q2. For the three months to the end of June, revenue was up 3.3%t at $10.79b, in line with expectations. Net income fell by more than a fifth to $1.22b amid a series of one-time adjustments related to its stake in Virgin Atlantic, hedges and taxes.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2017-07-14/sky/delta2019s-q3-outlook-falls-short-of-expectations
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Delta’s Q3 outlook falls short of expectations
US investors were left disappointed on Thursday after Delta, the country’s largest carrier by market value, issued Q3 guidance that fell short of expectations. The company said passenger revenue per available seat mile (PRASM) is expected to increase by only between 2.5 and 4.5% for the September quarter, confounding analysts’ expectations for a gain of as much as 5%. Costs meanwhile, as measured by available seat mile including profit sharing — are projected to rise 4%. The weaker-than-expected outlook comes despite the renewed drop in oil prices, which should result in lower jet fuel costs for airlines. It also contrasts with the rosier outlooks provided this week by rivals America Airlines and United Continental. After reaping the benefits of lower fuel prices for the past few years, airlines had endured a rough 2016 as a rebound in crude prices and new labour agreements added to their cost bases and they engaged in an aggressive fare battle. But shares have taken flight again since April, with the stock of many carriers trading at near record highs on signs that they are regaining pricing power. Delta issued its Q3 outlook alongside its results for Q2. For the three months to the end of June, revenue was up 3.3%t at $10.79b, in line with expectations. Net income fell by more than a fifth to $1.22b amid a series of one-time adjustments related to its stake in Virgin Atlantic, hedges and taxes.<br/>
