Delta shares tumble after airline lowers profit outlook on higher fuel prices

  • Delta lowers profit forecast for the second quarter to $1.65 to $1.75 from $1.80 to $2.
  • Airlines are enjoying strong demand, but it's getting more expensive to fly.
  • Airlines are grappling with higher fuel prices during the busiest travel season of the year.
Delta Airlines air travel
Andrew Harrer | Bloomberg | Getty Images

Shares of Delta Air Lines tumbled more than 3 percent on Wednesday after the airline said it expected a surge in fuel prices to eat into its second-quarter profits.

Delta expects to earn $1.65 to $1.75 a share in the three months to June 30, down from its forecast in April of $1.80 to $2 a share the airline said in a filing.

The airline, like its competitors, have been grappling with a jump in fuel prices, generally their second-largest expense after employee salaries. Delta said fuel prices are up about 50 percent over the past 12 months.

The timing of the price increase is especially challenging for airlines because higher costs are coinciding with the busiest travel period of the year and carriers are hesitant to cut back on flying when demand is high.

Delta shares were trading at $52.69 early in the session, down 3.6 percent on the day. American Airlines shares were off more than 2 percent, while United Airlines were little changed.