Delta Air cuts forecast for key revenue measure again

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Delta Air Lines Inc on Tuesday lowered its forecast for a closely watched revenue measure for the second time in less than a month, citing slower-than-expected improvement in average fares for flights booked at the last minute.

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The No. 2 U.S. carrier by passenger traffic said it expects passenger unit revenue ��� which compares sales to flight capacity ��� to fall about 0.5 percent in the first quarter ended March. (http://bit.ly/2oVfqGu)

The airline had previously expected first-quarter passenger unit revenue to be about flat.

In January, Delta had predicted a flat to 2 percent increase in first-quarter passenger unit revenue.

U.S. carriers have struggled to grow unit revenue, as cheaper fares fueled by stiff competition have pummeled the airline industry.

Southwest Airlines Co last month lowered its expectation for first-quarter operating unit revenue after "unexpected softness" in demand for last-minute flight bookings in the second half of February.

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In March, No. 1 U.S. airline American Airlines Group Inc cut its unit revenue forecast for the first quarter, mainly because it canceled fewer flights than the year before.

Delta also said on Tuesday it expects a first-quarter average fuel price of $1.68-$1.73 per gallon, down from a prior forecast of $1.71-$1.76.

The airline said it continued to expect operating margin of 10-11 percent for the quarter and an improvement in unit revenue in the second half of the year, that would offset higher fuel and labor costs.

Delta's shares were down 1.8 percent to $45.49 on the New York Stock Exchange.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Sai Sachin Ravikumar and Shounak Dasgupta)