Delta upbeat despite impact of computer glitch
Delta has given an upbeat update to investors despite confirming it will take a $150 million hit due to the recent power outage.
The airline said it was on track to produce a ‘solid’ 18-19% operating profit margin, slightly down on its previous outlook of 19-21%.
It said this would be achieved despite the impact of last month’s computer glitch which led to the cancellation of 2,300 flights.
Delta chief financial officer Paul Jacobson told investors the airline has lots of reasons to be optimistic.
Other airline stocks climbed on the back of the news, which came as Southwest Airlines also reported encouraging figures.
Shares of United Continental rose about 5%, American Airlines climbed 4.8% and JetBlue was up 3%.
Airline body IATA also released positive figures for the industry, saying passenger demand strengthened in July.
“Demand was stimulated by lower fares which, in turn, were supported by lower oil prices,” said IATA CEO Alexandre de Juniac.
IATA said North American airlines’ traffic climbed 4.8%, while capacity rose 5.1% with the result that load factor fell 0.3 percentage points to 86.1%.
"Seasonally adjusted volumes have risen at an annualized rate of more than 8% since March helped by transpacific and leisure traffic to Central America and the Caribbean," its latest report said.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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