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Delta Revenue Fails Expectations
Ryan Boyd July 06, 2016
U.S. airline stocks dropped on Tuesday after Delta Air Lines confirmed that one of their key revenue figures declined more than the carrier had expected in the second quarter. A spokesperson for Delta confirmed that revenue for every seat flown one mile dropped 5% in the second quarter instead of the 2.5% and 4.5% predicted by the company. The revenue per mile figure is frequently used as an indicator of airline pricing power, and investors are disappointed in this downturn. This is part of an overall pattern for Delta, as average fares have been steadily declining for 2016 as airlines have added flights and seats faster than demand can keep pace with.
To read more on this story, go to USA Today.
[Photo: South Fulton Chamber]
Considering how full their flights are, how are they adding flights faster than demand can keep pace?
What about the fact that they have destroyed and devalued thier FFP program so much that they have more bargin hunter flyers vs the more lucrative HFV and loyalist. Yes I understand that they may be adding capacity faster then what the demand is but it is probably not that much out of balance vs the fact that they have pushed away HFV to other airlines and turned them into begin hunters as well. If AA was paying attention they should really do some research into this phenomenon before fully following along with as the bottom of the barrel FF programs. They still have a chance to buck against the wind and stand out as an airline that truly cares and understands the benefits of keeping the HFV in a program that at least feels like it is geared to keep someone loyal to the airline even if the cost is more.