Delta Air Lines expects H1N1 to hurt its second quarter revenues largely due to weak point-of-sales bookings in Asia.
Outlining the drop off on 11 June during the Bank of America/Merrill Lynch transportation conference Northwest president Ed Basitan said customers in that region were somewhat spooked by a "pressing recall" of SARS earlier in the decade. Basitan assumed the role of Northwest president after its merger with Delta.
As a result bookings in May fell in a "very dramatic manner" Bastian notes. But explaining H1N1 was largely a second quarter issue, he estimates booking trends in Asia have picked up in the last couple of weeks.
Still Delta expects H1N1 to trigger a $125-$150 million revenue hit for the carrier during the second quarter.
Delta has opted to expand planned cuts in international capacity in September to 15% from previous estimates released in March of a 10% decline. Of the overall revised total Delta expects Transatlantic cuts to account for 20%.
Delta markets being eliminated include Cincinatil-Frankfurt/London Gatwick, New York JFK-Edinburgh and Atlanta-Seoul/Shanghai.
Bastian says Delta has revised second quarter operating margin estimates to 0%-2% compared with a previous range of 4%-6%. That's being driven by H1N1 effects and a drop off of sequential demand in May to June, usually a high demand month.