January 3, 2019 / 3:54 PM / 9 months ago

Delta shares fall 10 pct on lowered quarterly outlook; drags down rivals

Jan 3 (Reuters) - Shares of Delta Air Lines Inc dropped 10 percent on Thursday, after the U.S. carrier warned fourth-quarter unit revenue would be slightly below its prior forecast due to the lower-than-expected improvement in last-minute fares booked by travelers.

The No.2 U.S. airline said it now expects total revenue per available seat mile - a closely followed measure of airline performance - to rise about 3 percent, compared with the 3.5 percent growth it forecast earlier.

Shares of bigger rival American Airlines Group Inc fell 11 percent to $29.2, while smaller rivals United Continental Holdings Inc, Southwest Airlines Co, and JetBlue Airways Corp were down 5-7 percent in morning trading.

The broader U.S. markets fell sharply after Apple Inc’s rare sales warning added to fears of a global slowdown.

"While close-in yield momentum continues, the pace of improvement in late December was more modest than anticipated," Delta said. (bit.ly/2Rwcp1t)

Atlanta-based Delta also said it expects fuel price per gallon to be in the range of $2.38 to $2.43, about 10 cents below its earlier guidance.

Airlines usually take advantage of lower fuel costs to add more flights and seat capacity, a measure that can also drive down unit revenues. (Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila)

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