To Counteract Rising Fuel Costs, Delta Air Lines Considers Raising the Ticket Fare

Delta Air Lines is considering raising ticket prices in order to offset rising global fuel costs and economic inflation.

Highlights

  • Airlines in the United States have little option but to pass on fuel price increases to passengers in the form of higher fares, but they are optimistic that revived interest in travel will help them get through the next few months.
  • Fuel is the second-largest expense for US airlines after personnel expenses.
  • Delta Air Lines expects a profit in March (recovering to 78 percent of 2019 levels), as well as a quarterly pre-tax loss, thanks to the willingness of customers to spend on plane tickets. Similar thoughts are shared by other airlines in the nation.

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Delta Airlines

Booking a Delta flight may become more expensive in the near future, as the airline considers raising the price of tickets in reaction to increase in fuel prices. Airlines in the United States have little option but to pass on fuel price increases to passengers in the form of higher fares, but they are optimistic that revived interest in travel will help them get through the next few months.

Delta tickets may be more expensive

Delta Air Lines is considering raising ticket prices in order to offset rising global fuel costs and economic inflation. Delta Air Lines CEO Ed Bastian stated that passengers should expect higher fuel surcharges on foreign flights "as market circumstances permit," and that growing fuel costs will boost ticket rates both domestically and internationally.

Fuel is the second-largest expense for US airlines after personnel expenses. Airlines in the United States, unlike many others across the world, are not hedged against rising fuel prices, leaving them vulnerable to worldwide changes.

Although the increase in passenger numbers is positive, Bastian believes it is too early to make any definite conclusions. According to a Financial Times article, he said, “It’s a little early to tell what’s going to happen to oil prices and consumer demand over the summer. You’d never want to be in a position of cutting capacity when you’re having such robust demand.”

Revenue increase anticipated

Delta Air Lines expects a profit in March (recovering to 78 percent of 2019 levels), as well as a quarterly pre-tax loss, thanks to the willingness of customers to spend on plane tickets. Similar thoughts are shared by other airlines in the nation.

Nonetheless, JetBlue's Chief Executive Officer, Robin Hayes, decides to be cautious, despite record demand for his airline in several areas, signalling,

"As we get towards the second half of the year, we need to be cautious about what we anticipate the economy will do."

Datchanapriya is a journalism and mass communication student from Chennai. Has always been passionate about writing and connecting with people.

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