Delta's Q3 Profit Falls Below $1 Billion After Thousands of Cancellations

Delta Air Lines' third-quarter earnings dropped by 26%, as the company faced challenges from a global technology outage that led to thousands of flight cancellations, coupled with signs that growth in air travel is beginning to slow, David Koenig reported for the Associated Press (AP).

Delta expects to return to year-over-year earnings growth in the current quarter. I Photo: Delta AirLines

Delta earned $971 million, down from $1.31 billion in the same period a year earlier. Although revenue saw a slight increase, expenses—including labor, airport landing fees, and costs associated with its Delta Connection regional affiliate—grew at a faster pace, the Atlanta-based airline said.

Shares fell nearly 6% before the opening bell, negatively impacting other airline stocks as well. Delta stated, however, that it expects to return to year-over-year earnings growth in the current quarter.

The company anticipates benefiting from a reduction in flights by lower-cost competitors and is seeking compensation for the July outage that cost it $500 million.

CEO Ed Bastian noted that bookings for Thanksgiving and Christmas remain strong, but he expects a temporary dip in travel spending before the holiday season as Americans remain concerned about the outcome of the November elections.

The global technology outage in July was caused by a faulty update deployed by CrowdStrike, a cybersecurity firm providing software to numerous companies worldwide, on computers running Microsoft Windows.

The outage disrupted operations at thousands of businesses, including airlines, but Delta was particularly affected, leading to a U.S. Department of Transportation investigation into why the airline’s recovery was slower compared to others.