NEW YORK: After rejection of three-year labour contract by the company’s pilots, Delta Air Lines is planning to cancel orders for 60 new aircraft, said company’s chief executive Richard Anderson.
The company’s decision affects 40 Boeing 737-900 planes and 20 Embraer E-190 aircraft worth an estimated $4 billion based on the list price of the planes.
The decision to cancel the jets comes as some financial analysts have warned that plans by airlines to boost seat capacity could push the airline profitability lower.
On Friday, Delta pilots rejected a three-year contract by nearly two-to-one due to unhappiness with a proposed profit-sharing plan.
Delta reported second-quarter earnings of $1.5 billion, up 85.4 percent from the year-ago period in results boosted by a huge drop in fuel costs.
However, Delta also projected that the ratio of revenue to each seat mile flown, a key industry benchmark, would drop 4.5-6.5 percent in the third quarter.
The drop comes as carriers contend with tough pressure on airplane ticket prices due to additional seat capacity. In midday trade, Delta shares were up 1.5 percent to $44.33.
