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8-Sep-2016 9:39 AM

Delta adjusts 3Q2016 guidance, expects system outage to affect pretax income by USD150m

Delta Air Lines CFO Paul Jacobson stated (07-Sep-2016) the carrier is on track to produce a solid 18% to 19% operating profit margin (compared to a prior outlook of 19% to 21%) and nearly USD1.5 billion of operating cash flow, despite headwinds from operational disruption, volatile fuel prices and continued unit revenue weakness. Jacobson stated the Aug-2016 outage and subsequent operational recovery are expected to reduce 3Q2016 pretax income by USD150 million. The figure includes the USD100 million in negative revenue impact from the outage reported on 02-Aug-2016, and USD50 million in net costs of the outage. He reiterated Delta’s focus on being the "first network carrier to return to positive unit revenue growth", which he noted is an important indicator that margins and cash flows are sustainable regardless of the direction of fuel prices. [more - original PR - I[more - original PR - II]

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