Delta will cut its service between the U.S and UK by 6% for the coming winter as a result of Brexit
The cuts will be seasonal, said CEO
Ed Bastian, reflecting an expectation that fewer Brits will take vacations to
the U.S. next winter due to the weakened pound, which fell 12% versus the
dollar in the fallout from Brexit.
Bastian sought to downplay the move
as he took questions from reporters during Delta’ s second-quarter earnings
call Thursday.
“This is a normal part of the ebb
and flow of supply and demand,” he said.
Delta president Glenn Hauenstein
said the carrier would make the cuts by reducing London frequencies on off-peak
days, flying smaller craft on routes to second-tier U.K. markets, and by making
cuts to markets that primarily serve leisure flyers.
“There’s a lot of leisure traffic
coming out of the Manchesters, and those are the types of markets that we are
looking to reduce,” he said.
The comments came as Delta reported
net income during the second quarter of $1.55 billion, up from $1.49 billion
during the same period last year.
The carrier’s revenue dropped $260
million, or 2.4%, year-over-year to $10.45 billion, due in part to declines in
foreign currencies, as well as to what Hauenstein described as an imbalance
between supply and demand in Delta’s Asian and transatlantic route
networks.
The revenue result missed the
analyst expectations by $40 million. But the drop was offset by a decrease of
$260 million in expenses, driven largely by cheaper fuel costs.
Delta recorded earnings per share of
$1.47 in the second quarter, topping expectations by 5 cents. The
carrier’s stock was trading at $40.68 just after 2 p.m. Eastern time, up 2.8%.