Delta Air Cuts Quarterly Passenger Unit Revenue View

Delta Air Lines Inc. (DAL) lowered its outlook for first-quarter passenger unit revenue amid increasing pressures from a strong U.S. dollar on its international business.

The Atlanta-based carrier said passenger unit revenue, a key measure of performance for the airline sector, is expected to decline 1.5% for the quarter, mostly on currency impacts and as its domestic business didn't strengthen in March to the extent it expected.

The company previously projected a decline of roughly 1%.

Delta, the third-largest U.S. airline by traffic, said March passenger unit revenue was unchanged from a year earlier as growth of 2.5% in its domestic market offset pressures in its international business, predominantly currency fluctuations that cut passenger unit revenue by 1.5 percentage points.

The airline has been expanding its international presence through investments in other airlines as well as code-sharing agreements and partnerships. The company has a 49% stake in British carrier Virgin Atlantic and has minority stakes in Grupo AeroMexico SAB and Brazil's GOL Linhas Aereas Inteligentes SA.

Delta said its passenger traffic rose 2.5% last month. Capacity grew 2.9%, and the portion of seats filled--or load factor--fell to 85% from 85.3%.

For the quarter ended March 31, the company forecast its adjusted fuel price per gallon at $2.90 to $2.95, including hedges and other adjustments.

In January, Delta said falling gas prices lifted its profits for its fourth quarter and would continue to drive earnings this year. Delta has said it expects to use an estimated $2 billion in fuel savings this year to pay down debt and return cash to shareholders.

The company expects to report its first-quarter results April 15.

--Chelsey Dulaney contributed to this article.

Write to Tess Stynes at [e-mail]

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