Source: Reuters Author: Deepa Seetharaman 06/22/2009
Subject Concerned: Aircrew Airlines Human Resource
The H1N1 influenza virus could cost Delta Air Lines US$250 million in revenue this year, which the world's largest airline will offset by cutting capacity, its chief executive said on June 22.
"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 US$5.73 on the afternoon of June 22 on the New York Stock Exchange. The Amex airline index 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 US$125 million to US$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.
However, weakness in demand in Asia prompted the Atlanta-based airline to cut capacity there too.
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 in April 2007.