Delta’s profit rises on more traffic, lower fuel prices

Delta Air Lines plans to reduce international flying later this year as travel demand in some places weakens due to lower oil prices and the strong U.S. dollar.

The airline said Wednesday that it will make cuts of up to 20 percent on routes to Japan, India, Brazil, Africa and the Middle East. It will suspend winter flights to Moscow.

Delta announced the moves as it reported first-quarter profit that more than tripled from a year ago, helped by lower jet fuel prices.

The results were slightly better than analysts expected, and the shares rose in afternoon trading.

CEO Richard Anderson said it was Delta’s best January-through-March quarter ever both financially and operationally.

However, the strong U.S. dollar and low oil prices are hurting ticket sales in some foreign markets, and Delta announced that it will reduce its international passenger-carrying capacity by 3 percent later this year. It’s an even bigger cut — 6 percent — from Delta’s original, ambitious plan.

Anderson told analysts on a conference call that the moves would get the airline’s so-called unit revenue back on track. Revenue for every seat flown one mile, a closely watched figure in the airline business, fell 2 percent in the first quarter and is expected to decline between 2 percent and 4 percent in the April-through-June quarter.

Airline officials said that other than suspending seasonal service to Moscow, they would not eliminate routes altogether. Instead, they will use smaller planes or fly less often on existing international routes. U.S. passenger-carrying capacity will grow 2 percent.

Analysts have worried that falling oil prices have tempted airlines to add too many new flights, which tends to depress fares. They feared that airlines would abandon their recent strategy of no or slow growth in capacity, which has helped boost fares and produce record profits. Delta’s announcement cheered them.

“It’s a great sign that the company is going to be disciplined whenever there is any sign of demand weakness anywhere in the world,” Jim Corridore, an analyst with S&P Capital IQ , said in an interview. “We hope the rest of the industry follows Delta’s lead.”