Delta tells clients to anticipate flights to get dearer as gas costs soar

Delta Air Lines customers may see their flights become even more expensive as fuel prices soar.
The airline’s CEO, Ed Bastian, said on a call with reporters Tuesday that the carrier will “meaningfully reduce” its capacity growth plans, or the number of seats on its planes, as jet fuel prices have surged since the start of the war in Iran in February.
Delta said its fuel bill will be $2 billion higher this quarter due to the rising costs, CNBC reported.
However, fewer seats on the plane may lead to already-expensive airfare becoming even more costly.
Delta has already been taking measures to make up for rising fuel costs. The airline on Tuesday joined JetBlue Airways and United and raised its checked bag fees to $45 for the first bag, $55 for the second and $200 for the third.
Despite the sticker shock, Delta executives say the rising cost of air travel has not stopped travelers from booking flights.
The airline said it anticipates making a profit of about $1 billion, before taxes, for the current quarter, highlighting the continued demand for flights despite higher ticket prices.
“It’s a healthy travel time,” Bastian said during the Tuesday call, the Wall Street Journal reported. He also noted that the carrier’s wealthier customers “are prioritizing experiences and they’re wanting to travel.”
Delta also has plans to cut back its schedule to lower costs, including midweek and overnight flights, Bastian said.
Higher ticket prices and fewer flights may lead to stronger operating margins for Delta in its second quarter, the company said. Delta forecast adjusted earnings of $1 to $1.50 a share, falling below Wall Street’s expectations of $1.56 a share.
Bastian said Delta aims to recover about 40 to 50 percent of the higher fuel costs during its second quarter as it raises prices, Reuters reported.
Delta also expects a $300 million benefit from its refinery in the second quarter, up from about $60 million in the first quarter as refining margins widened.
Bastian indicated that the increased fees could last.
“At this level of fuel, it’s hard to call anything temporary,” he said.
Source: independent.co.uk
