Delta computer glitches hit profits for third quarter

Delta Air Lines has reported adjusted pre-tax income for the September 2016 quarter of $1.9 billion, a $278 million decrease from the September 2015 quarter. 

The technology outage and subsequent operational recovery Delta experienced over four days in early August reduced pre-tax income for the quarter by an estimated $150 million.

“Delta’s resiliency stood out this quarter as we worked through the outage, continued revenue headwinds, and volatile fuel prices to produce the industry’s best operational reliability and service for our customers along with solid margins, cash flows and returns for our owners,” said Ed Bastian, Delta chief executive officer.

“With our focus on building a more sustainable and durable business, we will be taking a cautious approach to 2017 by keeping our capacity in line with the December quarter’s one percent growth level.”

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Delta’s operating revenue for the September quarter decreased 5.6 per cent, or $624 million, of which $100 million was due to the outage and $70 million was from prior year Yen hedge gains.

Passenger unit revenues declined 6.8 per cent, including nearly two points of impact from the outage and Yen hedges, on a 1.5 per cent increase in capacity. 

“While we were encouraged by our unit revenue trends through the September quarter, we have more work ahead of us to achieve our goal of positive unit revenues,” said Glen Hauenstein, Delta president.

“With further slowing of our capacity growth in the December quarter and additional traction on our revenue management initiatives, we should make progress against that goal and we expect our December quarter unit revenues to decline by three to five per cent year over year.”