Delta's capacity cuts will allow it to make more money from each mile flown, both from more crowded planes and higher ticket prices to match demand.
Delta Air Lines Inc. said fourth-quarter capacity will be reduced as much as 3 percent, as the world’s second-largest carrier posted a drop in passenger traffic.
The capacity cut will be in a range of 1 percent to 3 percent, Delta said today in a statement. Third-quarter profit excluding some items was 90 cents a share, trailing the 91-cent average of 17 analysts’ estimates compiled by Bloomberg.
“We are in the process of implementing a $1 billion program of structural initiatives that we anticipate will generate significant savings in the second half of 2013,” Chief Financial Officer Paul Jacobson said in the statement.
Delta charged more for tickets to mute the impact from the 1 percent decrease in miles flown by paying passengers across its network. Revenue rose 1 percent to $9.92 billion, lagging behind the $9.97 billion average projected by analysts.
Net income jumped to $1.05 billion, or $1.23 a share, from $549 million, or 65 cents, a year earlier. Delta said the one-time items in the quarter included a $440 million gain on fuel hedge accounting and charges for trimming jobs, trading airport slots and shutting down the Comair regional unit.
Editors: Ed Dufner, James Callan. To contact the reporter on this story: Mary Jane Credeur in Atlanta at firstname.lastname@example.org. To contact the editor responsible for this story: Ed Dufner at email@example.com.
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