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Delta CEO Says 20% of Revenue Now Comes From ‘Non-Traditional’ Sources

May 07, 2014 2:30 pm

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“Non-traditional ticket” is the new word to describe “fee.”

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Gary Cameron  / Reuters

A Delta Air Lines jet lands at BWI Thurgood Marshall International Airport near Baltimore. Gary Cameron / Reuters

Delta Air Lines Inc said on Wednesday an important revenue measure would show gains in May and June, aided by business demand and more reliable operations.

The carrier said unit revenue, or passenger revenue per available seat mile, would likely rise in the 6 percent to 7 percent range for both months. That’s compared with a growth forecast of 5 percent to 7 percent Delta gave last month.

Delta President Edward Bastian told a Bank of America Merrill Lynch conference that was carried over the Internet that the revenue outlook was “very solid.” He said Delta’s overall revenue could rise 10 percent in the current second quarter.

Bastian said Delta saw the greatest opportunity to boost profit in ancillary products that include food and seat upgrades, adding that 20 percent of the carrier’s revenues are now derived from non-traditional ticket sources.

American Airlines Group reiterated on Wednesday that it expects unit revenue to rise 4 percent to 6 percent in the second quarter.

Shares of Delta were up 0.4 percent to $37.77 in morning trading, and American Airlines edged up 0.2 percent to $36.73.

(Reporting by Karen Jacobs in Atlanta; Editing by Nick Zieminski)

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