\n<\/p>\n
The CEO of Delta Air Lines, Ed Bastian, braced customers for higher fares following the surge in oil prices sparked by the US-Israel war on Iran, amid strong demand from passengers.<\/p>\n
Though rising oil prices have cost the company an extra $330m in fuel expenses, and it projected a $2bn increase in fuel costs in the current quarter, Delta forecast that revenue would grow 10% as flyers continue to book flights.<\/p>\n
It was a \u201chealthy\u201d time to travel, Bastian said on Wednesday.<\/p>\n
But as several carriers raise baggage fees, blaming volatility in the oil markets, Bastian hinted such moves could be permanent \u2013 increasing the cost of air travel. \u201cAt this level of fuel [pricing], it\u2019s hard to call anything temporary,\u201d he said.<\/p>\n
Oil prices plunged after Iran announced the strait of Hormuz will be reopened as part of a two-week ceasefire agreement it made with the US. Brent crude, the global benchmark, dropped from $110 a barrel to under $95 a barrel, though prices are still about $20 a barrel higher than before the conflict began.<\/p>\n
Major US airlines have been rocked since the US-Israel conflict with Iran began in late February. American Airlines and United\u2019s stock prices have jumped down 25% and 13% respectively since the start of the year.<\/p>\n
In late March, the United Airlines CEO, Scott Kirby, said that ticket prices could jump 20% if fuel prices remained high, though airlines are trying to prevent consumer demand from falling.<\/p>\n
\u201cDemand is the strongest it\u2019s been,\u201d Kirby said in March, noting that 2026 had been a record-breaking year for travel bookings.<\/p>\n
Though Delta\u2019s share price rose 17% last year with soaring demand, its stock price has remained flat so far this year \u2013 a sign of both consumer resilience and that the conflict may have eaten into the company\u2019s growth. Its shares rose 6% during early trading on Wednesday.<\/p>\n
Bastian said that Delta will cut some capacity, trimming midweek and overnight flights that have fewer passengers, but use up expensive fuel. United made a similar announcement of capacity cuts last month as it projected higher oil prices for the rest of the year.<\/p>\n
But Bastian had previously said Delta had benefited from the impacts of the K-shaped economy, in which huge growth in the stock market has led to more spending from affluent Americans whose wealth is tied to markets, even as lower-income Americans pull back spending due to higher prices.<\/p>\n
Even before the conflict, he noted that most of the company\u2019s growth came from wealthier customers buying business- and first-class seats. Now, those customers are still spending.<\/p>\n
\u201cOur consumers, who sit at the top end of the K, are continuing to invest in travel,\u201d Bastian told CNBC. \u201cIt\u2019s their priority, and they want to have that experience.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The CEO of Delta Air Lines, Ed Bastian, braced customers for higher fares following the surge in oil prices sparked by the US-Israel war on Iran, amid strong demand from passengers. Though rising oil prices have cost the company an extra $330m in fuel expenses, and it projected a $2bn increase in fuel costs in<\/p>\n","protected":false},"author":1,"featured_media":48074,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[7036,303,3277,4989,23904,16252,495,84,268,269,2229,2251,261],"class_list":{"0":"post-48073","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-braces","9":"tag-business","10":"tag-ceo","11":"tag-delta","12":"tag-fares","13":"tag-flyers","14":"tag-higher","15":"tag-iran","16":"tag-oil","17":"tag-prices","18":"tag-surge","19":"tag-tied","20":"tag-war"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/48073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48073"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/48073\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/48074"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}