The H1N1 influenza virus could cost Delta Air Lines $250 million in revenue this year, which the world’s largest airline will offset by cutting
capacity, its chief executive said on Monday.
“The steps we are taking have essentially involved capacity because the flu has decreased demand,” said Delta CEO Richard Anderson at the company’s annual shareholders meeting. Delta shares were down 34 cents or 5.6 percent at $5.73 on Monday afternoon on the New York Stock Exchange. The Amex airline index .XAL was down 4.8 percent.
Airlines continue to grapple with fallout from the virus, formerly known as swine flu. The flu has compounded the industry’s other worries, namely the notable drop-off in business travel and the surge in oil prices.
During an investor conference earlier this month, Delta president Edward Bastian said the virus hurt second-quarter revenue by $125 million to $150 million. Delta has “significantly” cut capacity in Mexico and Latin America during the second quarter, Anderson said during the meeting, but expects to add some back later this year. Weakness in demand in Asia prompted the Atlanta-based airline to cut capacity there.
Another issue that emerged at the shareholders’ meeting was labor. A handful of retired pilots addressed Anderson and Bastian with concerns about their pension plans, which were affected by Delta’s bankruptcy which ended April 2007.