Delta reduces flights plans, delays plane deliveries

US carrier Delta Air Lines said Monday it will cut planned flights growth and delay deliveries of four Airbus A350 aircraft to contend with rising fuel prices and shrinking revenue.

The second-largest US airline said in a regulatory filing that it would reduce envisioned capacity growth for the fourth quarter this year from 2.7 percent to below two percent.

The domestic growth target alone will be cut from more than four percent in the first three quarters of the year to 2.5 percent for the final quarter.

On the international routes, overall capacity will remain unchanged to lower in the second half of the year for the second year running, the company said.

Latin America and Pacific capacity growth would be reduced, and Atlantic capacity would be slashed from about 3.0-4.0 percent during the summer to flat for the winter season, it added.

The Atlanta, Georgia-based carrier also announced it would delay deliveries of four wide-body Airbus A350s, previously scheduled in 2018, to 2019-2020, citing the need to make the delivery schedule "more consistent with expected pace of international market improvement."

The new strategy "allows Delta to address current fuel and revenue headwinds, while positioning the company to achieve its long-term goals," it said in the filing Monday with the Securities and Exchange Commission.

"Broad commercial initiatives should result in Delta being the first network carrier to return to positive unit revenue growth later this year," it added.

Delta said it would also hike its dividend by 50 percent, to 81 cents from 54 cents, and step up the pace of its $5 billion share buyback, now to be completed by May 2017.

Investors cheered the news, pushing Delta shares up 3.4 percent to $43.01 in afternoon trade. That lifted other airlines, with American Airlines adding 1.5 percent and United Airlines' parent United Continental Holdings 1.4 percent.