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How Did Delta Perform Operationally In November?

The third quarter results for Delta Air Lines ( DAL ) and its investors were quite disappointing, given a 6% y-o-y drop in revenues and a -7% decline in unit revenues. This was in part attributable to a one-time technology outage episode, and in part to the continued supply-demand imbalances plaguing the industry as a whole. In the month of October 2016, the trend was seen to persist with Delta's unit revenues down -6.5%. Of the decline seen, 2 percentage points is accountable to the timings of the holiday period.

However, in November the legacy carrier managed to pull off somewhat of a turnaround, with unit revenues down only -1% y-o-y. We can partially account for the stabilization in the decline of unit revenues to positive yields in Latin America and the upcoming holiday season bookings. Talking about the capacity, Delta's available seat miles decreased by -6.0% internationally, and rose 2.3% domestically, bringing the consolidated capacity down by -0.7% y-o-y. Year-to-date, the capacity was up 2.1% y-o-y, in line with its full year capacity guidance of 1%-2%. Further, passenger traffic rose only slightly (0.3%), mainly due to the the declines seen internationally. This reflects superfluous capacity on the international routes for the airline. However, occupancy rate (+0.9%) and the number of passengers boarded (2.1%) were both seen improving in the month, indicating that the airline is on the right path.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.