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Traffic on Delta rises but key revenue figure falls

A Delta Air Lines jet is on the

A Delta Air Lines jet is on the tarmac at Seattle-Tacoma l Airport on Oct. 8, 2012. Credit: AP / Ted S. Warren

Delta says traffic is up from last year but a key revenue measure is down, indicating that fares are likely declining from last summer.

The airline says revenue is being hurt by the strong dollar, lower fuel surcharges on international routes, and lower prices in some U.S. markets.

Delta Air Lines Inc. said Tuesday that passenger revenue for every seat flown one mile fell 3 percent last month compared with July 2014. Delta filled a higher percentage of seats than last summer, so it's likely that the drop in the closely watched revenue figure means average fares were lower.

The decline is not a surprise. Analysts have worried that after several years of holding down supply, airlines are adding flights and seats too quickly, causing prices to fall. Deutsche Bank predicted that U.S. airlines will report a decline in the per-seat figure of between 5 percent and 6 percent compared with July 2014. Delta executives said last month that by year end they would limit capacity to late-2014 levels.

Delta is the first major airline to report July results. It said that traffic -- measured in the miles that passengers fly -- rose 4.7 percent last month from July 2014. The airline increased capacity by 4.2 percent, and the average flight was 87.9 percent full, up from 87.5 percent a year earlier.

Atlanta-based Delta is the nation's third-biggest airline company after American and United. Delta shares rose 66 cents to $46.39 in morning trading. They began the day down 7 percent in 2015.


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