17-May-2016 1:22 PM

Delta expects to become 'first network carrier to return to positive unit revenue growth' in 2016

Delta Air Lines stated (16-May-2016) broad commercial initiatives should allow it to become the first network carrier to return to positive unit revenue growth later in 2016, which is "an important indicator that margins and cash flows are sustainable regardless of the direction of fuel prices." The carrier reported the following for its domestic, Pacific, Atlantic and Latin markets:

  • Domestic: The carrier will deaccerelate growth in 4Q2016 with reductions focused on underperforming markets. The comfort+ fare will be implemented from May-2016 and beyond;
  • Pacific: Winter capacity is down 15% year-over-year, with reductions again focused on underperforming markets.
  • Latin: Currency improvements in Brazil has driven better demand and higher fares, which will is expected to turn Brazil RASM to positive in winter 2017. The carrier is already achieving positive RASM in Mexico and the Caribbean, and is adjusting capacity in central America as it seeks to target underperforming markets;
  • Atlantic: Currency turns to headwind in 3Q2016 with both the euro and pound strengthening. Business cabin revenues are up during peak leisure summer with continued momentum expected in 2H2016. [more - original PR]

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