* Flight cancellations aid key revenue measure
* Analyst cuts profit estimates for carriers
March 10 Delta Air Lines on Monday said it expects a first-quarter profit despite a revenue hit of $90 million, as winter storm cancellations consolidated passengers onto remaining flights.
Delta said the storms hurt pretax profit for the first quarter by about $55 million as it canceled 17,000 flights. The carrier said it now expected operating margin, a measure of income to costs, of 6.5 percent to 7.5 percent for the first quarter, compared with a prior view of 6 percent to 8 percent.
But Delta said the flight cancellations aided unit revenue, which is expected to rise 3 percent to 4 percent in the current quarter, compared with Delta's prior view of a 2 percent to 4 percent increase. Unit revenue is an important measure of pricing power and how full planes are for airlines.
Cancellations can help unit revenue as more travelers are put on remaining flights.
"All in, we think it's going to be a very solid first quarter," Delta president Edward Bastian told a J.P. Morgan investor conference.
JetBlue said at the same conference it had canceled nearly 4,000 flights because of the winter storms, and Southwest Airlines said it halted about 6,500 flights in January and February.
JetBlue forecast its unit revenue would rise 1 percent to 2 percent in the first quarter, while Southwest outlined expected growth of 3 percent.
Cowen & Co airline analyst Helane Becker cut her first quarter profit estimate for Delta to 30 cents a share from 32 cents in a note to clients, citing the updated outlook.
Becker also cut her profit estimate for JetBlue Airways for that period to 6 cents a share from 13 cents.
Flight cancellations tend to add to airline costs during the first quarter, when winter storms hit the hardest.
American Airlines Group said in a statement on Monday it canceled about 28,000 flights in January and February, and while cancellations raised costs and would hurt first-quarter profit it still expects unit revenue to rise about 2 percent to 4 percent in the period.
United Continental Holdings said it halted more than 11,000 flights in February alone. United disclosed late last month that disruption from the storms would hurt its first-quarter unit revenue.
Shares of the major U.S. airlines were mixed, with Delta down 1 percent to $35.02 on Monday and United off 1.4 percent to $47.09.
American was up slightly at $39.03 and JetBlue was up 0.1 percent to $9.05. Southwest shares were up 1 percent to $23.34.