Delta Air Lines Will Slow Growth to Ensure Business Travelers Pay Higher Fares
Photo Credit: Delta's Comfort + cabin is performing well, but the airline will still slow its growth later this year. Delta Air Lines
Skift Take
Airlines remain highly profitable, but there are signs U.S. carriers may be expanding too much. We'll find out soon whether other carriers will follow Delta's lead and moderate their growth.
Delta Air Lines will curb its domestic growth starting in late August as it seeks to increase revenue and ensure business travelers booking at the last minute pay more for tickets.
The decision, announced Thursday on the carrier's second quarter earnings call, comes as Delta and its competitors continue to report lower year-over-year revenue per available seat mile, an industry metric measuring how much money a carrier makes for each mile it flies. Delta's passenger revenue per available seat mile, or PRASM, decreased 4.9% compared to the second quarter of 2015. The airline predicted third quarter unit revenues will decrease 4 to 6 percent, also year-over-year.
As it seeks to improve its performance, Delta said it will reduce domestic capacity by three percentage points by the fourth quarter, compared to today. The airline did not say how
