Published on : Thursday, June 7, 2018
The Delta airlines said in a filing that it expects to earn $1.65 to $1.75 a share in the three months ending June 30. This is down from its forecast in April of $1.80 to $2 a share.
Delta airlines have been grappling with a jump in fuel prices, generally their second-largest expense after employee salaries.
Earlier this week, the International Air Transport Association, an industry group that represents most of the world’s airlines, cut its profit outlook for airlines this year due to higher costs.
The officials of Delta Airlines said fuel prices are up about 50 percent over the past 12 months. That’s enough to crimp profits even though the airline expects revenue growth of between 4 and 5 percent quarter from the year-earlier period, a narrower range from the 3 to 5 percent the airline forecast in April.
The timing of the fuel 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 ended down 0.9 percent at $54.17, recovering from a more than 3-percent decline earlier in the session.
Tags: aviation, delta airlines