Delta faces substantial losses due to swine flu

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According to the chief executive of Delta Air Lines, the swine flu virus could end up costing the carrier $250 million in revenue for 2009. He indicated that the airline would attempt to offset the reduction in revenue by cutting capacity.

Richard Anderson, the Delta CEO, said at the annual shareholders meeting: “The steps we are taking have essentially involved capacity because the flu has decreased demand.”

Shares in the airline were down by 34 cents or 5.6 percent on Monday afternoon in New York trading.

Airlines worldwide continue to struggle with the impact of the flu outbreak on travel demand. It has compounded other problems faced by the industry, including surging oil prices and a decline in corporate travel.

Earlier in June, during an investor conference, Edward Bastian, who is the president of Delta Air Lines, said that the swine flu outbreak led to a reduction in second-quarter revenue of $125 million to $150 million.

Delta “significantly” reduced Mexico and Latin America capacity during the second quarter, according to Anderson’s comments during the meeting, but the carrier expects to add some of that capacity back later in the year. Weaker demand in Asia has prompted the carrier to cut capacity in that region as well.

Thanks to www.reuters.com for the above quotes, for more information on this article please visit their website.

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