Shares of Delta Air Lines Inc (DAL.N) fell on Tuesday after the carrier lowered its forecast for a closely watched revenue metric for the second time in less than a month.
Delta said it expects passenger unit revenue - which compares sales with flight capacity - to fall about 0.5 percent in the first quarter ended on March 31. (bit.ly/2oVfqGu)
The No. 2 U.S. carrier by passenger traffic previously projected first-quarter passenger unit revenue would be about flat. Prior to that, in January, Delta had said it expected a flat to 2 percent increase in first-quarter passenger unit revenue.
Delta shares ended down 2.61 percent at $45.11 on the New York Stock Exchange.
Stock prices across the industry also dropped, including those of United Continental Holdings Inc (UAL.N), American Airlines Group Inc (AAL.O) and Southwest Airlines Co (LUV.N).
Delta blamed slower-than-expected improvement in average fare prices for flights booked at the last minute for the decline in its unit revenue outlook.
Delta also said on Tuesday it continued to expect an operating margin of 10 percent to 11 percent for the quarter and an improvement in unit revenue in the second half of the year that would offset higher fuel and labor costs.
"I think people are maybe having a little bit of an eye-opening moment on the extent of (employee profit-sharing) cost," R.W. Mann & Co analyst Bob Mann said.
Other U.S. airlines are struggling to increase unit revenue as low-price carriers such as Spirit expand domestic flights and upstarts such as Norwegian Air cut trans-Atlantic fares.
Southwest Airlines last month lowered its expectation for first-quarter operating unit revenue after "unexpected softness" in demand for last-minute flight bookings in the second half of February.
In March, the world's largest airline, American Airlines, cut its unit revenue forecast for the first quarter, mainly because it canceled fewer flights than the previous year.
(Reporting by Ankit Ajmera in Bengaluru and Alana Wise in New York; Editing by Shounak Dasgupta and Dan Grebler)