Delta Air Lines forecasts smaller drop in key revenue measure

Delta Air Lines Inc said on Wednesday it expected a smaller decline in fourth-quarter passenger unit revenue, a closely watched metric, than it had previously forecast, citing strong demand in December.

Delta's revised passenger unit revenue forecast for the quarter ending December comes weeks after it came out with an improved number on its investor day last month.

Shares of the No. 2 U.S. airline by passenger traffic were up 2.2 percent at $50.56 in morning trading.

Delta said it expects passenger unit revenue, which compares sales to flight capacity, to be down 2.5-3.0 percent for the quarter, compared with its December forecast of a decline of 3 percent.

The airline had initially projected December-quarter passenger unit revenue to drop as much as 5 percent. The company said on Wednesday it expected capacity growth of about 1 percent in the quarter.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)