Third-quarter profits fell 26% at Delta Air Lines (DAL), which struggled to overcome a global technology outage that led to thousands of flight cancellations, and indications that air traffic growth is starting to slow.
Shares fell nearly 6% before the opening bell, dragging down other airlines.
Delta earned $971 million, up from $1.31 billion a year earlier. Revenue rose slightly, but spending on labor, airport landing fees and its regional affiliate Delta Connection grew much faster, the Atlanta airline said Thursday.
However, on Thursday it said it will return to year-over-year earnings growth in the current quarter. Delta believes it can benefit from a decline in flying by cheaper competitors, and the airline is seeking compensation for the July outage that cost it $500 million.
CEO Ed Bastian said bookings for Thanksgiving and Christmas are strong, but he expects a brief decline in travel spending before the holidays as Americans worry about the outcome of the November election.
The global technology outage in July occurred after CrowdStrike, a cybersecurity company that provides software to dozens of companies around the world, deployed a defective update to computers running Microsoft Windows.
The outage disrupted the operations of thousands of companies, including airlines, but Delta was particularly hard hit, prompting a U.S. Department of Transportation investigation into why the company didn’t recover as quickly as other airlines.
