Delta Expects $30 Million Hit on Hurricane Florence Flight Cancellations
(Bloomberg) -- Delta Air Lines Inc. is taking a $30 million blow from Hurricane Florence.
The hit to pretax earnings amounted to a 0.5 percentage point drag on total revenue for each seat flown a mile last quarter, the Atlanta-based airline said Tuesday in a statement. The closely followed financial gauge probably climbed about 4 percent to 4.5 percent last quarter, the company said. The midpoint of the previous forecast was 4.5 percent.
Delta and other carriers canceled flights over several days last month as Hurricane Florence hit the U.S. Southeast and caused widespread flooding. Airlines also have been battered by a 34 percent jump in jet fuel prices over the last 12 months. Delta and other carriers have raised fares and fees for items such as checked bags to help offset the ballooning cost.
Companies including American Airlines Group Inc. have also increased the cost of alcoholic beverages purchased during flights.
Delta fell 2.8 percent to $55 at 9:41 a.m. in New York, the biggest drop on a Standard & Poor’s index of U.S. airlines.
Adjusted earnings will be about $1.70 to $1.80 a share in the third quarter, Delta said. The forecast keeps the same midpoint as the previous outlook, and compares with the $1.77 average of analysts’ estimates compiled by Bloomberg.
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