Delta Air Lines Inc. plunged the most in more than three years, pulling rivals lower, after disappointing ticket pricing prompted the carrier to cut its revenue forecasts.
- Fourth-quarter revenue from each seat flown a mile, also known as unit revenue, will rise 3 percent from a year earlier, the Atlanta-based airline said in a regulatory filing Thursday. Delta previously forecast a 3.5 percent gain. Total revenue will rise about 7 percent instead of the 7.5 percent that had been expected.
- The news added to investor concerns that industrywide fare increases would falter and weigh on profit. “The pace of improvement in late December was more modest than anticipated,” Delta said.
- Thursday’s update compounded anxiety after Delta in December said unit revenue, a closely watched gauge of pricing power, would trail the midpoint of a previous forecast.
- Delta said, however, that demand from business and leisure travelers remained “healthy” in the fourth quarter. “Momentum continues” for average fares per mile on near-term reservations, the airline said.
- Delta dropped 8.9 percent to $45.63 at 10:09 a.m. in New York after tumbling as much as 9.3 percent, the most intraday since August 2015. Other carriers fell sharply as well, bringing a Standard & Poor’s index of airlines down 7.2 percent, the worst performing group on the S&P 500.
- Delta narrowed its outlook for fourth-quarter profit to $1.25 to $1.30 a share, the high end of its earlier expectation.
- Delta filing
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