Delta Sees Empty Seats in January, but That May Not be Bad

It's time for the January traffic roundup, and once again, bad weather during the month should have helped airlines fill more seats when flights canceled. Delta (DAL), however, stood out by having fewer seats filled. There could be a few things going on here, and not all are bad.

Delta has a substantial operation at JFK, so the storms that rolled through should have caused flights to cancel. That means people are forced to be rebooked on other flights so more seats get filled. But Delta actually saw the percent of seats it filled drop by 1.4 points. What gives?

Filling fewer seats can mean a few things.

• Delta could have added too many seats into the market and it couldn't fill them. This fits with the international operation where capacity grew by 11.4 percent year-over-year. But domestically, there was less capacity than last year and still fewer people in those seats.
• It's also possible that demand is just weakening and people aren't interested in flying as much. Other airlines don't really show that, so it seems unlikely.
• The likeliest scenario is Delta decided that it wanted to increase its fares to the point where fewer people were willing to buy tickets. This might be a good strategy. If you can get higher fares from fewer people, that may still create more revenue for you as an airline. But we won't know that until first quarter results come out.

Related:

• December Airline Traffic: Don't Even Bother, As Winter Weather Skewed Everything
• Airlines Temper Their Urges to Grow in November
• Airline Capacity Jumped in October, but It's Not Sparking a Fare War -- Yet