Americans are traveling in record numbers this summer, but Delta Air Lines saw second-quarter profit drop 29% due to higher costs and discounting of base...
Americans are traveling in record numbers this summer, but Delta Air Lines saw second-quarter profit drop 29% due to higher costs and discounting of base-level fares across the industry.Revenue rose 7% to nearly $16.66 billion — a company record for the quarter. That is not surprising to anyone who has been in an airport recently. The Transportation Security Administration screened more than“Demand has been really strong,” CEO Ed Bastian said in an interview.
But Bastian disputed any notion that middle-class travelers are pulling back on spending. He said it is simply supply and demand — the airline industry, including low-fare carriers, is adding flights even faster than demand is growing, leading to lower fares. “The discounting is in the lower-fare bucket,” he said.Delta plans to add flights at a slower rate for the rest of the year, and Bastian said he believes other airlines will too, which could give the carriers more pricing power.
Atlanta-based Delta said its earnings, excluding one-time items, worked out to $2.36 per share, a penny less than the average forecast among analysts in a FactSet survey.
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