\n<\/p>\n
Delta Airlines saidelevated airfares are likely to last despite a recent drop in oil prices, reporting strong appetite for travel and record-high revenue in its quarterly results Friday.<\/p>\n
Though the company had its highest quarterly fuel expense in its history, demand has been high enough to pass along 60% of its extra fuel costs to consumers, Delta\u2019s CEO, Ed Bastian, told CNBC, with plans to eventually pass along all elevated costs.<\/p>\n
\u201cThe demand for air travel is really strong, and as a result of that, we posted a $1.4bn profit,\u201d Bastian told CNBC.<\/p>\n
Airlines across the board have had to pass on elevated fuel costs to customers or cut routes this year as the war in the Middle East drove oil prices up. While some Americans have been forced to cut or adjust their travel plans amid the higher fares, others appear unwilling to sacrifice their travel plans. AAA estimated that a record-high number of Americans drove or flew for their Independence Day holiday plans, despite high gas prices.<\/p>\n
Bastian said that he estimated that 60% of the airline industry\u2019s profits this quarter would be coming from Delta, which holds 20% of the market share. Delta is the first airline to report its second quarter results; United Airlines and American Airlines will announce their earnings later this month.<\/p>\n
Bastian noted that Delta consumers are at the \u201ctop end\u201d of the K-shaped economy, calling them \u201cfinancially very healthy\u201d with a \u201ctremendous amount of wealth accumulation\u201d. In its earnings report, Delta reported that its premium revenue grew 17% year-over-year, whereas its main cabin sales increased by just 8% over the same time frame. Earlier this week, the airline expanded its premium offerings, launching a \u201cbasic business\u201d option that offers business class without expedited check-in or lounge access.<\/p>\n
\u201cWhen you ask our consumers what is their main purpose and use of discretionary funds, they\u2019ll say we want to participate in the experience economy, with air travel being the number one,\u201d he said. \u201cWe want to go places. We want to see things.\u201d<\/p>\n
Despite airfares that are up between 12 to 15% from last year, Bastian said airfares \u201ccontinue to be a tremendous bargain\u201d, amid overall inflationary pressures. He added that Delta flyers were still willing to spend on travel, citing the \u201cpost-Covid effect\u201d.<\/p>\n
Despite the sharp in drop in global oil prices last month after the US announced a peace deal with Iran, oil and gas prices are creeping up again as the future of the ceasefire remains uncertain. The current national average for a gallon of gas is $3.88, which is cheaper than last month\u2019s levels but still $0.71 higher than last year.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delta Airlines saidelevated airfares are likely to last despite a recent drop in oil prices, reporting strong appetite for travel and record-high revenue in its quarterly results Friday. Though the company had its highest quarterly fuel expense in its history, demand has been high enough to pass along 60% of its extra fuel costs to<\/p>\n","protected":false},"author":1,"featured_media":51040,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[24962,190,4989,4136,1845,495,1545,268,269],"class_list":{"0":"post-51039","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-airfares","9":"tag-airline","10":"tag-delta","11":"tag-drop","12":"tag-expected","13":"tag-higher","14":"tag-industry","15":"tag-oil","16":"tag-prices"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/51039","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=51039"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/51039\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/51040"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}