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Delta Air Lines Inc. plans to cut growth in U.S. seating capacity this quarter to the slowest rate in more than a year amid an oversupply in the industry that’s weakening fares.
The expansion will be about 3 percent, Delta said Wednesday as it posted a second-quarter profit that beat analysts’ estimates. Delta’s available seating had risen by at least 3.2 percent in every period since April 2014 and by as much as 5 percent in the first three months of this year.
Analysts have been urging carriers to rein in capacity to balance available seats with demand, strengthening pricing power. At the same time, the U.S. Justice Department is investigating whether the major airlines are colluding on those adjustments, boosting airfares.
Delta’s move follows a similar cutback by American Airlines Group Inc. last week, in which American said U.S. capacity will expand 1 percent to 2 percent in 2015. Several of the major U.S. airlines have suggested they are looking at bigger capacity reductions after the busy summer travel season.
Shares of Atlanta-based Delta rose 1.6 percent to $44.35 at 7:33 a.m. in New York. They dropped 11 percent this year through Tuesday.
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This article was written by Michael Sasso from Bloomberg and was legally licensed through the NewsCred publisher network.