Delta Falls Short of Expectations as It Grapples With Seating Surplus
Skift Take
Delta, which has consistently been one of the most profitable U.S. airlines, slightly underperformed in the second quarter, partly due to an oversupply of domestic seats. That could signal trouble for domestic carriers this summer.
Despite a record number of people traveling this summer, Delta — one of the most profitable U.S. airlines — fell short of Wall Street expectations.
The carrier reported record revenues for the second quarter but profits fell 29%, mostly due to an overcapacity of seats and higher fuel costs. Delta president Glen Hauenstein said during a call with analysts Thursday that domestic seat growth in the summer has outpaced demand, affecting main cabin revenues.
Another thorn for Delta is the Olympics, which is set to take place in Paris in two weeks. Historically, the Olympics haven’t drawn more traffic for airlines since business travel to the host region typically decreases during the games.
