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Crowded Flights Due to Winter Delays Boost Delta’s Revenue Per Mile

Mar 05, 2014 5:00 am

Skift Take

It’d be hyperbolic to suggest winter storms caused the increase to Delta’s revenue per mile measurement. The cancellations only helped boost RPM by 0.5% and other airlines report losses due to the storms.

— Samantha Shankman

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Sim Wei Yang  / Reuters

A passenger waits for his flight near a Delta Air Lines logo at Detriot Airport November 20, 2010. Sim Wei Yang / Reuters


Delta Air Lines Inc. says bad weather caused it to scrub nearly 8,000 flights in February, but the cancelations helped boost a key measure of revenue per mile.

The shares soared 5.7 percent on Tuesday to an all-time high since the company exited bankruptcy protection and issued new stock in 2007.

After the market closed Monday, Fitch Ratings upgraded Delta’s credit one notch to “BB-” on the airline’s ability to generate cash despite high fuel prices.

On Tuesday, Delta, the world’s second biggest airline behind United, said that traffic rose 2.4 percent last month as passengers flew 13 billion miles.

Travel to and from Latin America jumped 20.6 percent, although those flights accounted for just 11 percent of total traffic.

Atlanta-based Delta said that revenue for every seat flown one mile rose 4 percent from a year ago. That statistic is watched closely in the airline business, and it rises when airlines put more people on each flight or raise average prices.

Delta credited the revenue-figure increase on strong U.S. demand and results from trans-Atlantic flying. Within the U.S., traffic grew 2 percent. Delta cut the number of seats on trans-Atlantic flights, making each flight more full.

The airline added that about a half-point of the 4 percent gain in the revenue statistic came from canceling flights, which can cause remaining flights to be more crowded. United Airlines, however, reported last week that winter storms caused it to cancel 22,500 flights in January and February and reduced revenue for every seat flown one mile. While Delta canceled 4.5 percent of its February flights, United scrubbed 12.9 percent of its January and February schedule.

Delta trimmed passenger-carrying capacity by 0.3 percent last month, and the average flight was 81.2 percent full, up from 79.1 percent in February 2013.

Shares of Delta rose $1.86 to close at $34.45 and peaked at $34.72 during the day. They have gained 25 percent so far in 2014.

Copyright (2014) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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