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Delta Air Lines says capacity cuts muted October unit revenue drop
November 3, 2015 / 3:28 PM / 2 years ago

Delta Air Lines says capacity cuts muted October unit revenue drop

(Reuters) - Delta Air Lines Inc (DAL.N) on Tuesday said passenger unit revenue fell slightly in October, its smallest decline in months, as the company shrank flight capacity to match lower demand.

Delta planes line up at their gates while on the tarmac of Salt Lake City International Airport in Utah September 28, 2013. REUTERS/Lucas Jackson

Delta said passenger unit revenue, which measures sales relative to flight capacity, fell just 1 percent in October, compared with a third-quarter drop of 4.9 percent.

A strong U.S. dollar has hurt foreigners’ spending power in the United States and lowered the value of foreign sales in dollar terms. Delta, the third-largest U.S. airline by capacity, said the October decline included a drop of 2 percentage points because of currency exchange.

Delta said a 4 percent cut of international capacity in October helped slow the decline. Wall Street analysts, noting stagnant foreign demand, have said U.S. airlines should shrink service so fewer discount fares are necessary to sell out flights.

Atlanta-based Delta has forecast that passenger unit revenue will fall between 2.5 percent and 4.5 percent this quarter. President Ed Bastian told investors on a conference call last month that unit revenue would be a “bit choppy,” with the strongest results in November and the weakest in December.

Shares of Delta rose about 0.5 percent in early trading.

Reporting By Jeffrey Dastin in New York; Editing by Lisa Von Ahn

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