* Sees 1st-qtr passenger unit revenue falling 0.5 pct
* Shares fall as much as 2.2 pct
* Sees 1st-qtr average fuel price of $1.68-$1.73/gallon
(Adds analyst comment, updates share price)
April 4 Shares of Delta Air Lines Inc
fell on Tuesday after the carrier lowered its forecast for a
closely watched revenue metric for the second time in less than
Delta said it expects passenger unit revenue - which
compares sales with flight capacity - to fall about 0.5 percent
in the first quarter ended on March 31. (bit.ly/2oVfqGu)
The No. 2 U.S. carrier by passenger traffic previously
projected first-quarter passenger unit revenue would be about
flat. Prior to that, in January, Delta had said it expected a
flat to 2 percent increase in first-quarter passenger unit
Delta shares ended down 2.61 percent at $45.11 on the New
York Stock Exchange.
Stock prices across the industry also dropped, including
those of United Continental Holdings Inc, American
Airlines Group Inc and Southwest Airlines Co.
Delta blamed slower-than-expected improvement in average
fare prices for flights booked at the last minute for the
decline in its unit revenue outlook.
Delta also said on Tuesday it continued to expect an
operating margin of 10 percent to 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.
"I think people are maybe having a little bit of an
eye-opening moment on the extent of (employee profit-sharing)
cost," R.W. Mann & Co analyst Bob Mann said.
Other U.S. airlines are struggling to increase unit revenue
as low-price carriers such as Spirit expand domestic flights and
upstarts such as Norwegian Air cut trans-Atlantic fares.
Southwest Airlines 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
In March, the world's largest airline, American Airlines,
cut its unit revenue forecast for the first quarter, mainly
because it canceled fewer flights than the previous year.
(Reporting by Ankit Ajmera in Bengaluru and Alana Wise in New
York; Editing by Shounak Dasgupta and Dan Grebler)