Delta says outage cost $100m

Delta Air Lines Inc said its revenue for August was reduced by about $100 million due to an outage that led to cancellations of 2,300 flights over three days.

Unit revenue at US airliners have been shrinking for more than a year amid a price war in the industry. Additionally, Delta has ranked No.1 in the Business Travel News Annual Airline survey for an unprecedented five consecutive years.

The company’s total system ASM advanced 0.5 percent in August.

Delta’s technical problems in August were caused by a malfunction in the electrical system that powers computers at the airliner’s Atlanta headquarters. Analysts said even without the outage, the number was slightly worse than expected and worse than Delta’s forecast of a decline between 4 percent and 6 percent for the entire third quarter.

Delta said that consolidated passenger unit revenue, which measures unit revenue as it relates to a carrier’s flight capacity and distance flown, dropped 9.5% in August.

The revenue number indicates that average fares are still falling.

The loss of revenue was also impacted the fact airliners are adding flights and seats faster than growth in demand, causing an oversupply in market.

Even excluding the impact of the outage, Delta’s unit revenue missed expectations, JPMorgan said in a note cited by Reuters. For the year-to-date period, ASM advanced 2.5 percent.