Delta Blames Sequester for Low Demand
Delta Air Lines blamed the sequester for lower close-in bookings in March, according to an SEC earnings report filed today. According to the report, most of Delta's unit revenue increases came from its trans-Atlantic and Latin offerings, while a weakening yen shrunk Pacific purchases. Although unit revenues managed a 2% year-over-year increase in March, the airline felt the squeeze on several fronts:
Reason | Cause |
|---|---|
Lower close-in bookings | Sequestration |
Lower-than-expected demand | Delta's attempt to boost yields |
"Temporary inefficiencies" | Implementation of new revenue management technology |
Source: SEC.gov.
As a result, Delta has lowered its Q1 2013 unit revenue guidance from a 4.5%-5.5% year-over-year increase to a 4%-4.5% bump. Although it expects a profitable quarter with stable operating margins, this news comes as a blow to Mr. Market's expectations for the company. As of this writing, shares are down 7.26% for the day.
The article Delta Blames Sequester for Low Demand originally appeared on Fool.com.
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