FILE- In this March 2, 2018, file photo, Delta Air Lines planes are grounded in New York. Delta Air Lines reports earns on Thursday, July 12. (AP Photo/Mark Lennihan, File)Delta Air Lines executives expressed confidence Thursday that they can raise prices high enough to cover a fuel bill that is likely to be $2 billion more this year than last year.
Airline officials said that strong travel demand and higher average fares fully covered a run-up in fuel prices late last year, and the same trends are helping offset a second spike in fuel prices that occurred in late spring.
The trend is likely to continue. Delta predicted that it will pay 40 percent more for fuel in the July-through-September quarter than it paid a year earlier, nearly identical to the increase Delta paid in the April-through-June quarter. Jet fuel is Delta’s second-biggest expense after labor.
Delta shares rose Thursday but were still down nearly 10 percent so far this year, compared with a 4.5 percent gain for the Standard & Poor’s 500 index.
“One of the things that has been weighing on the stock, as we all know, is the growth in fuel prices in the short term,” CEO Ed Bastian said on a call with analysts and reporters. “We expect to be able to cover most if not all of it this year, by the end of the year.”