Delta misses projection for March revenue
ATLANTA (AP) — Delta Air Lines Inc. said Tuesday that a key measure of revenue rose less than expected in March, because demand was hurt by attempts to get passengers to pay more and by government spending cuts.
Delta's revenue for each seat flown one mile rose 2 percent for the month compared to March 2012. As recently as March 4 it was predicting a gain of 4.5 percent to 5.5 percent.
The miss drove Delta shares lower.
It said last-minute bookings were hurt by automatic government spending cuts, which began taking effect March 1.
Delta also cited "temporary inefficiencies" as it put in new technology that helps it decide how much to charge for flights. Airlines try to project demand for each flight so they can decide how much to charge for tickets. Getting the prediction wrong can cause an airline to sell too many tickets cheaply, or to charge too much and drive away customers.
Delta also said revenue for flying to Latin America and to Europe rose. But a weaker yen hurt revenue for flights to Asia, a key market for Delta.
The airline said March traffic rose 0.1 percent compared to March 2012. Flying capacity was down 0.6 percent. Because it cut flying capacity even while traffic rose, occupancy rose 0.6 percentage point to 84.7 percent.
For the first quarter, traffic fell 0.6 percent, while flying capacity fell 2.6 percent. Occupancy for the quarter rose 1.5 percentage points to 81.2 percent.
Shares of the Atlanta-based airline fell $1, or 6.2 percent, to $15.25 in morning trading.