Delta reports 60% jump in fuel costs and 15% rise in fares, expects high ticket prices to persist
Delta Air Lines said its jet fuel expense grew 60% in the third quarter, adding about $1.6 billion versus a year earlier. The airline passed most of the cost to customers, with average ticket prices about 15% higher in the quarter. CEO Ed Bastian told investors that travelers have accepted the new price level and that fares are likely to stay elevated even if fuel prices later fall. The company posted a modest increase in net income despite the cost shock.
Why it matters
The higher fares offset the fuel cost surge, allowing Delta to improve earnings modestly, but the sustained price level may keep ticket costs high for travelers throughout the holiday season ().
Key facts
- 1Jet fuel costs rose 60% in the third quarter, representing an increase of $1.6 billion from the same period a year earlier. kxxv.com
- 2Airfare prices were about 15% higher during the quarter, offsetting much of the fuel cost increase. kroc.com
- 3Delta’s net income showed a slight gain despite the higher fuel expense. kxxv.com
- 4Thanksgiving ticket prices averaged $400, up 31% year over year, and Christmas tickets averaged $450, up 23% year over year. kxxv.com
- 5Seat occupancy was 86% across the quarter, creating upward pressure on fares. kxxv.com
- 6CEO Ed Bastian said fares are “very sustainable” and are not expected to decline even if fuel prices retreat. kroc.com
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.