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Delta's quarterly net profit down 4pc to US$1.26 billion, sales off 6pc

DELTA Air Lines posted a third quarter four per cent year-on-year profit loss to US$1.26 billion, drawn on revenues of $10.48 billion, which fell six per cent.

Third-quarter operating income was $1.97 billion, down 11 per cent.

Delta CEO Ed Bastian said US airlines were experiencing the "weakest revenue environment in recent memory".

"We will be taking a cautious approach to 2017 by keeping our capacity in line with the December quarter's one per cent growth level," he said.

Apart from that, Delta took a $100 million revenue hit in the quarter from the carrier's August system crash that led to 2,300 cancelled flights over three days.

Delta's third-quarter unit revenue, as measured in PRASM, declined 6.8 per cent year on year to 13.14 cents.

Mr Bastian noted that the quarter was the seventh in a row in which Delta's unit revenue has declined.

Atlanta-based Delta is taking a conservative approach to capacity, which will be capped at one per cent growth in the fourth quarter. That one per cent capacity growth level will be maintained throughout 2017, Mr Bastian said.

"The challenge is to get [unit revenue growth] back positive and we're optimistic that's exactly what we're doing," he said.

Mr Bastian explained that a lack of pricing power, not weak demand, is the main reason for the weak revenue environment.

Delta credited cost control with maintaining strong probability despite the revenue troubles. It reduced third quarter expenses four per cent year on year to $8.51 billion, including $397 million in savings on aircraft fuel costs.

Delta's third quarter system traffic decreased 0.2 per cent to 58.97 billion RPMs on a 1.5 per cent rise in capacity to 69.03 billion ASMs, producing a load factor of 85.4 per cent, down 1.4 points.