Business · Companies · 22 hrs ago
Delta says strong demand is helping offset higher fuel costs
Delta Air Lines said its fuel costs rose 60% in the third quarter, an increase of $1.6 billion from a year earlier.
Passengers paid about 15% more for flights, helping the airline slightly increase its net profit.
Delta says demand remains strong despite higher fares, and expects that to continue through the rest of this year and into next year.
Travelers are booking holiday trips earlier, and fares for Thanksgiving and Christmas are higher than last year, according to travel economist Hayley Berg.
Much of Delta’s fare and revenue growth has come from customers paying more for premium seats, whose revenue rose 18%.
Delta chief executive Ed Bastian does not expect fares to fall even if fuel prices ease, saying the market has accepted current prices.
He expects fuel costs to remain high in the fourth quarter.
Delta Air Lines said strong demand and higher fares are helping it offset a sharp rise in fuel costs.
The airline’s jet fuel costs rose 60%, or $1.6 billion, in the third quarter compared with a year earlier.
Passengers paid about 15% more to fly, allowing Delta to record a slight increase in net profit.
Delta CEO Ed Bastian said demand remains strong and expects it to continue through the rest of this year and next year.
Revenue from premium seats rose 18%, while available seats were essentially unchanged from a year earlier.
- Who
- Delta Air Lines, led by CEO Ed Bastian.
- What
- The airline said strong demand and higher fares are helping offset rising fuel costs.
- When
- Delta reported its third-quarter results on Friday. The year is not stated.
- Where
- Not stated.
- Why
- Passengers are continuing to book flights and pay higher fares, including for premium seats.
This story does not have two clearly opposing sides.
Not having those profits affected, to me, is incredible
Thanksgiving is already averaging $400 a ticket, up 31% year over year
Fuel was the impetus for the industry to move quickly to adjust the pricing environment
Delta and other airlines did not reduce fares when jet fuel prices fell after a spring increase linked to the war in Iran.
Delta’s jet fuel costs rose 60% compared with the same period a year earlier.
Delta reported its third-quarter results and said demand remained strong.
- Jet fuel costs
- Up 60%, or $1.6 billion, year over year in the third quarter
- Passenger fares
- About 15% higher
- Premium-seat revenue
- Up 18%
- Thanksgiving fares
- Averaging $400 per ticket, up 31% year over year
- Christmas fares
- About $450, up 23% year over year
Sources
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