Delta expects airfares to keep falling
NEW YORK– Fares keep falling at Delta Air Lines, and the airline says it expects them to lose altitude the rest of the year.
The airline reported Thursday that a key measure of airfares was down almost 7% in the three months ending in September, compared with a year ago. And fares for the rest of the year should be off 3% to 5% from the end of last year.
The lower fares led to a drop of more than 5% in revenue, and helped trim profits in the quarter by $278 million to $1.9 billion.
A computer outage in August that forced Delta to scrap 2,000 flights also cost the airline $150 million. Profits fell even as the airline saved $348 million because fuel was cheaper.
Lower fuel prices have also encouraged airlines to add flights and explore new routes, and those additional options for passengers have driven fares down.
“We have more work ahead of us to achieve our goal” of raising fares, said Glen Hauenstein, Delta’s president.
Fares were lower across Delta’s system. Only fares on Latin American routes posted a modest increase of 1%.
Delta is the first major U.S. airline to report results for the third quarter, but American Airlines, United and Southwest have also reported lower fares in their earlier financial results. Those airlines are report earnings over the next two weeks. The four major airlines carry about 80% of U.S. passengers.