NEW YORK (AP) — Airline stocks fell Tuesday after Delta Air Lines Inc. reported that a key revenue figure fell sharply in July, evidence of a continuing slide in average ticket prices.
Delta said that passenger revenue for every seat flown one mile fell 7 percent in July compared with a year earlier. Delta had predicted that the figure would decline by between 4 percent and 6 percent for the July-through-September quarter with July being the weakest month.
UBS analyst Darryl Genovesi said it would be difficult for Delta to hit the midpoint of its third-quarter forecast, even with ticketing data pointing to a smaller decline in the revenue figure by September. He added that the decline in revenue per mile for August is likely to be worse than in July.
Average ticket prices have been falling since early 2015 as airlines add seats faster than the growth in travel demand. Analysts have been pushing airlines to drive up prices by growing more slowly, and Delta said last month it would do that in the fourth quarter.
Meanwhile, J.P. Morgan analyst Jamie Baker said that airlines led by JetBlue succeeded in raising many fares by $3 each way over the past several days. He called it encouraging but said a single fare hike would not solve the industry’s revenue per mile woes.
In afternoon trading, shares of Atlanta-based Delta were down $2.89, or 7.3 percent, to $36.59. Other airline stocks also sold off.
American Airlines Group Inc. was down $2.09, or 5.9 percent, to $33.51; United Continental Holdings Inc. fell $2.96, or 6.3 percent, to $44.40; Southwest Airlines Co. lost $1.41, or 3.8 percent, to $35.63; and JetBlue Airways Corp. dropped $1.09, or 6 percent, to $17.11.