Delta expects higher airfares to persist as fuel prices fall

Delta Air Lines announced Friday that elevated airfares are likely to persist despite a recent drop in fuel prices, citing sustained strong demand for travel and disciplined industry capacity. The airline reported robust second-quarter results and reaffirmed its full-year profit outlook, signaling confidence that recent fare increases will hold.

The carrier posted adjusted earnings of $1.56 per share for the quarter, surpassing analyst expectations of $1.48. Total adjusted revenue reached $17.67 billion. While net income fell 25% from a year earlier to $1.6 billion, operating revenue rose 19% to $19.76 billion. The decline in profit was attributed to the highest quarterly fuel expense in the company's history, which increased by $1.9 billion year-over-year due to a 75% jump in fuel costs.

Despite these costs, strong passenger demand allowed Delta to recover about 60% of the fuel cost increase through higher fares in the second quarter. CEO Ed Bastian said the airline expects to recover nearly all elevated costs this quarter. He described current airfare levels as sustainable, driven by robust demand across customer segments. "Airfares are a function of supply and demand,"...