Delta anticipates continued capacity cuts in Q1

New York
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Delta Air Lines anticipates that capacity will be down by 2% to 4% during the first quarter compared to a year earlier.

The Atlanta-based SkyTeam alliance member will cut domestic capacity by 1% to 3%, and international capacity by 3% to 5% during the period, says Ed Bastian, president of Delta, during an earnings call today.

Atlantic capacity cuts will drive the decline, with the region down 8% to 10% versus the first quarter of 2012.

Bastian says that capacity cuts over the Atlantic during the fourth quarter of 2012 "paid off", as capacity fell by 7% but unit revenues rose by eight percentage points.

Delta cut overall capacity by 1% during the period, versus the same quarter in 2011.

Consolidated unit revenues during the quarter ending 31 March are expected to be up 4% to 6%, says Bastian. January is expected to be up by 5% to 6%, with February and March "building well" but at slower growth rates, he adds.

Delta anticipates an operating margin of 2.5% to 4.5% during the first quarter.

Average fuel costs including taxes, hedges and the impact from the Trainer refinery will be between $3.15 and $3.20 per gallon.