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Delta Cuts Flights to U.K. in the Aftermath of Brexit

The Atlanta-based carrier cited that a drop in currency and global political instability was the trigger behind the move, which comes just as it reveals its Q2 results.

Delta Air Lines has announced that its upcoming winter schedule will see flights to and from the United Kingdom reduced by six percent. In a statement, the Atlanta-based carrier has said that Brexit along with the sudden drop in Britain’s currency has triggered these schedule cuts.

This reduction in service will equate to a one percent drop in growth for the fourth quarter of the year across the carrier’s entire operation. In terms of year-on-year results, this means that Delta will be left with a one percent increase in its total flight capacity.

Prior to this announcement, Delta was an eager player in the trans-Atlantic market. In 2013, it acquired a significant stake of Virgin Atlantic Airways and also entered into a partnership agreement with the British airline, with which it codeshares.

While Delta has benefitted from low oil prices, this boon is ebbing and it appears that its unit revenues are now struggling. Delta CEO Ed Bastian is honest about what the implications of this are for the carrier.

“As we look to the remainder of the year, the large year-on-year savings driven by lower fuel are largely behind us. It is important to achieving our long-term financial targets that we get unit revenues back to a positive trajectory,” he said in the company’s profit statement.

With this in mind, the schedule cuts are focused mainly on the trans-Atlantic leisure travel sector. The carrier is also planning to reduce flights on off-peak days and will switch to smaller aircraft on certain routes.

Delta’s announcement comes just as the carrier unveiled earnings of $1.7 billion for the second quarter of the year. But despite the profit, the carrier also reported a 4.9 percent year-over-year drop in revenue.

The ultimate goal, explained Glen Hauenstein, Delta’s president, is to return the carrier to stability.

“We’ll continue to move quickly and aggressively with all our commercial levels, including an incremental 1 point reduction in our December quarter capacity levels, to make sure we create the momentum we need to achieve this goal,” he said.

[Photo: Airplane-Pictures.net]

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5 Comments
S
Sohan July 17, 2016

Good riddance.

U
UncleDude July 17, 2016

Nothing to do with Brexit..All to do with moving Transatlantic operations to their Lower Running Costs Subsidiary...Virgin Atlantic..

J
jonsg July 16, 2016

@cynosura's hit the nail on the head. Prices LHR-ATL are ludicrous and unjustifiable. I'm glad that the only time I've flown that route, it's been on a client's coin!

D
diver858 July 15, 2016

Last time I checked, Delta was a for profit entity, understands a thing or two about how to run a successful airline.

C
cynosura July 15, 2016

They can blame it on BREXIT if they choose, but the planes from ATL-LHR are rarely packed full due to Delta's and Virgin's (their partner) sky high pricing year around. I've flown this route for years and there was a time when I rarely saw empty seats during the summer months but their are plenty now. Fares are double or higher than what they were a few years back. Rather than lower the price of the ticket, they prefer to cut back the number of flights so that they can keep their fares high. Note that when oil prices dropped drastically it did not "trigger" a fare reduction, it just added additional profit for Delta. Mark my word, if oil prices go back up there will be yet another adjustment for higher oil prices. Please note that I am specifically speaking of the Atlanta-Heathrow routes. Where there is actual competition (JFK, O'Hare, Boston) Delta fares are actually somewhat competitive.