12:46 PM EDT, 10/11/2024 (MT Newswires) -- Delta Air Lines ( DAL ) said a slower rate of capacity growth should help drive revenue acceleration in Q4.

Excess capacity, which forces airlines to discount fares to fill seats and weighs on revenue, grew at a rate of 4% in Q3, down from 8% in Q2. Domestic capacity led the way down at 3% growth. The company is calling for overall capacity growth of 3% to 4% in Q4, driving revenue acceleration of 2% to 4%.

Delta executives expect to see continued revenue benefits from lower capacity levels in early 2025, led by domestic and other business lines improving.

Countering the boost to revenue from reduced capacity growth are forecasts for reduced travel demand during the US elections in November. Delta expects the elections to have a 1-point impact on unit revenue.

Delta's implied revenue per seat mile shows a drop of 0.48%, compared with the Street's expectation of a 0.4% gain, while the airline's guidance also implies an 8% decline in fuel prices and a 1% headwind from the elections, meaning the outlook "isn't entirely clean," Bernstein analyst David Vernon said in a note to clients.

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