Delta CEO Says Higher Airfares May Persist Even If Fuel Prices Fall
Delta CEO Ed Bastian said strong demand has allowed the airline to pass along higher fuel costs through increased ticket prices without hurting profits. Delta's third-quarter adjusted revenue rose 16% year over year to $17.6 billion, while jet fuel expenses climbed 62% on an adjusted basis. Bastian suggested fares could remain elevated even if fuel prices eventually decline, because travelers have accepted current price levels.
Delta's third-quarter adjusted revenue reached $17.6 billion, up 16% from a year earlier, though it narrowly missed analyst expectations. Revenue per seat mile rose 15%, reflecting stronger fares and steady ticket demand. Jet fuel costs on an adjusted basis increased 62%, a $1.6 billion jump.
Oil's rise has been linked to the Iran war, which disrupted Strait of Hormuz transit. Brent stood at $108, over 70% higher annually, while U.S. Gulf Coast jet fuel nearly doubled to $4.34 a gallon. U.S. carriers generally do not hedge fuel, though Delta owns a refinery.
If fares stay elevated even after fuel costs ease, households and businesses could face lasting pressure on travel budgets. Airlines may preserve stronger margins, while price-sensitive travelers might fly less or shift to other modes. Tourism-dependent communities could see mixed effects: higher spending per visitor may offset fewer arrivals. The outcome may depend on whether demand remains resilient and whether competitors expand capacity.