Delta shells out $150 million for tech glitch

Delta shells out $150 million for tech glitch

A four-day computer failure in August cost Delta Air Lines $150 million, the carrier disclosed while delivering results for the quarter to September.

The airline reported that income fell by about 4% to $1.3 billion in the third quarter, slightly better than analysts expected.

Delta’s operating revenue of $10.5 billion was 5.6% lower than the same period last year previously but included the impact of the outage.

Chief executive Ed Bastian described the three months as “the weakest revenue environment in recent memory” but that the company also saw “a lot of green shoots in the domestic arena”.

He said: “Delta’s resiliency stood out this quarter as we worked through the outage, continued revenue headwinds, and volatile fuel prices to produce the industry’s best operational reliability and service for our customers along with solid margins, cash flows and returns for our owners.”

In the “challenging revenue environment” Delta saw a 6.8% year-over-year dip in passenger unit revenues – the amount of money collected for every mile each seat is flown – for the quarter but attributed two points to the technology outage and hedge gains in Japanese yen in the prior year.

President Glen Hauenstein said: “With further slowing of our capacity growth in the December quarter and additional traction on our revenue management initiatives we expect our December quarter unit revenues to decline by 3-5% year over year.”

After growing capacity conservatively at 1.5% for the September quarter, Delta plans to slow growth to 1% for the December quarter and into 2017 so it can get back to positive unit revenues, likely sometime early next year, the airline said.

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