Delta Air Lines cut its adjusted guidance for the third-quarter of the financial year following last month’s computer glitch that resulted in 2,300 flight cancellations.
Chief financial officer Paul Jacobson told investors that the outage and subsequent operational recovery are expected to reduce September quarter pre-tax income by $150 million.
The figure includes $100 million in “negative revenue impact” from the outage and $50 million in net costs of the IT problem.
Jacobson said Delta was on track to produce a “solid” 18-19% operating profit margin – compared to a prior outlook of 19-21% – and nearly $1.5 billion of operating cash flow, despite operational disruption, volatile fuel prices and continued unit revenue weakness.
He reiterated to investors Delta’s focus on being the first US network carrier to return to positive unit revenue growth – an important indicator that margins and cash flows are sustainable regardless of the direction of fuel prices.
Meanwhile, the US carrier is to expand in Asia with a new service between Atlanta and Seoul in Korea from June 3, 2017 using a 291-seat Boeing 777-200
Delta and Korean Air are to expand a joint codeshare pact from the final quarter of the year.
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