Delta predicts ‘unprecedented decline’ in revenue

Delta Air Lines expects airline industry revenue to decline 8 to 12 percent next year, which is significantly greater than in past economic downturns except for the aftermath of the Sept. 11, 2001, terror attacks.

Delta president Ed Bastian on Tuesday called it “an unprecedented level of decline in the amount of airline industry revenue, but it’s also related to what we’re seeing going on across other economic sectors.”

The company expects car-makers’ revenue to fall even more, according to Jim Cron, Delta’s senior vice president of global sales and distribution. Cron and Bastian spoke at a meeting with investors.

Past downturns in the 1980s and 1990s led to declines in airline industry revenue closer to 1 to 2 percent, while the decline after Sept. 11 was about 17 percent, according to Bastian.

Atlanta-based Delta is cutting its capacity and Bastian said he expects the airline to be “solidly profitable in 2009.” He also said the company expects its costs of integrating with merger partner Northwest Airlines to be about $500 million in cash, down from a previous estimate of $600 million.

Separately, Delta’s top executive for route planning, Glen Hauenstein, indicated the newly merged airline may not keep all the aircraft orders that Northwest has placed with Boeing.