Delta rev­enue warn­ing hurts air­line’s stock

The Irish Times - Business - - BUSINESS NEWS -

Delta Air Lines sent US air­line stocks slid­ing yes­ter­day, af­ter warn­ing that fourth-quar­ter rev­enues would be lower than fore­cast and re­viv­ing in­vestors’ con­cerns that the in­dus­try will strug­gle to keep rais­ing ticket prices.

The car­rier pre­dicted that ad­justed unit rev­enue for the fourth quar­ter would rise 3 per cent, com­pared with prior guid­ance of 3.5 per cent, and an ini­tial guid­ance range of 3 per cent to 5 per cent.

In­vestors wor­ried that rev­enues will weaken in 2019 in an in­dus­try that has been no­to­ri­ous for profit-sap­ping price com­pe­ti­tion.

Shares in Delta were down 9 per cent by mid-morn­ing in New York, Amer­i­can Air­lines shares fell 8 per cent and United Con­ti­nen­tal dropped 5 per cent.

“The over­all de­mand en­vi­ron­ment re­mains healthy with strength in both busi­ness and leisure seg­ments through­out the quar­ter,” Delta said in an in­vestor up­date, but it added a note of cau­tion on the pace of ticket price rises at the end of last year.

“While close-in yield mo­men­tum con­tin­ues, the pace of im­prove­ment in late De­cem­ber was more mod­est than an­tic­i­pated.”

– Copy­right The Fi­nan­cial Times Lim­ited 2019

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