Delta to Boost Capacity on Overseas Uptick -- WSJ
April 11 2019 - 2:02AM
Dow Jones News
By Doug Cameron
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 11, 2019).
Delta Air Lines Inc. plans to trim domestic flying growth in the
second half of the year but will add capacity overall as business
on overseas routes to Europe and Asia improves.
The nation's third-largest carrier by traffic said Wednesday
that it plans to boost capacity by 3% to 4% this year compared with
2019. That is a percentage point higher than guidance the carrier
offered in December, though trimming of domestic flying growth
helped allay investor fears that carriers are adding too much
capacity and depressing leisure fares.
Trans-Atlantic flights have been a source of weakness for U.S.
carriers in recent months, but Delta expects its closely watched
unit revenue in the market to return to growth during the
summer.
The improvement has been led by corporate and premium traffic, a
segment coveted by JetBlue Airways Group Inc., which analysts
expect to unveil plans as soon as Wednesday to launch its first
European flights within the next two years, according to people
familiar with the situation.
JetBlue declined to comment. Delta last week said it had plans
to launch additional services to Europe from Boston and New York,
two of JetBlue's main bases.
"We will see what the supply-and-demand balance is but we've had
a very good couple of years in the trans-Atlantic and we expect
that to continue," said Delta Chief Executive Ed Bastian on an
investor call.
Mr. Bastian said Delta continued to pursue a small, potential
investment in Alitalia, the state-owned flag carrier that is part
of its SkyTeam global alliance.
His comments came as Delta reported quarterly profit at the top
end of analysts' expectations, reset after an investor update last
week, and second-quarter guidance was also in line, lifted in part
by the benefit of a new credit-card deal with American Express Co.
Delta's shares were up 1.5% in midday trading Wednesday.
JetBlue on Wednesday said it expects to report that revenue per
available seat mile fell about 3.1% in the first quarter. Delta
said its unit revenue rose 2.4% in the first quarter.
Adjusted net income for Atlanta-based Delta totaled $639
million, or 96 cents a share, compared with $529 million, or 75
cents a share, a year earlier, ahead of the 90 cents a share
analysts estimated, according to a FactSet poll.
Virgin Atlantic Airways Ltd., the U.K.-based carrier in which
Delta has a 49% stake, on Wednesday delivered a GBP38.9 million
($50.9 million) loss in 2018 compared with a loss of GBP65.5
million the year earlier. Virgin last year agreed to pursue tighter
cooperation with Delta and Air France-KLM SA, another Virgin
Atlantic stakeholder. That deal awaits regulatory clearance.
--Kimberly Chin and Robert Wall contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
April 11, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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