AP

Delta hikes Q2 revenue outlook on sharply higher airfares

Jun 1, 2022, 8:56 AM | Updated: Jun 2, 2022, 4:06 am

To hear it from Delta Air Lines, happy days are here again, with travelers gladly paying sharply higher fares just to get on an airplane and go somewhere this summer.

Delta said Wednesday that it expects second-quarter revenue will be back to pre-pandemic 2019 levels, even with fewer flights. The airline said revenue per seat should be up to 8 percentage points better than it originally expected.

However, the Atlanta-based airline is facing surging prices for jet fuel. Other expenses — primarily labor — are spiking too. Delta expects non-fuel costs to soar up to 22% above 2019 levels on a per-seat basis, more severe than a mid-April forecast of 17%.

With the mixed outlook, Delta shares closed down 5%, and other airlines stocks also fell more than the broader market.

Heading into summer, travelers are paying more for any type of seat, from basic to premium, Delta CEO Ed Bastian said during an investor conference.

“We expect pricing this summer to be up probably somewhere between 25% and 30% on average,” Bastian said. “We’ve never seen anything of that scale.”

It’s not hard to find people on social media complaining about high fares, but airline executives scoff at the notion that the current prices could scare away customers.

Speaking later at the same investor event, United Airlines CEO Scott Kirby said fares are only back to where they were in 2014, after adjusting for inflation. Besides, he said, travel demand has proven to be unaffected by price.

“It you’re worried about pricing destroying demand, you are betting against history,” Kirby declared.

The surprisingly strong rebound in air travel this year has allowed airlines to push fares higher but also left them struggling to handle the crowds with fewer workers than they had before the pandemic. Staffing issues contributed to widespread cancellations and delays over the Memorial Day holiday period.

Delta scuffled more than any other big U.S. airline, canceling more than 800 canceled flights during a five-day span. The union representing Delta’s pilots blamed understaffing.

Bastian said Delta’s corps of 12,000 pilots is big enough, but it will take eight to 12 months to train new hires and current ones who will replace the 2,000 senior pilots who retired or quit during the pandemic.

The CEO said the airline — which last week trimmed its planned summer schedule by up to 3% — is building more time between flights and tweaking its schedule at the Atlanta airport to run a smoother operation.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Arizona doctors California abortions...

Associated Press

Arizona doctors can come to California to perform abortions under new law signed by Gov. Newsom

Arizona doctors can temporarily come to California to perform abortions for their patients under a new law signed by Gov. Gavin Newsom.

4 minutes ago

Father convicted of first-degree murder in northern Arizona...

Associated Press

Arizona man convicted of first-degree murder in starvation death of 6-year-old son

A northern Arizona father was convicted of first-degree murder Thursday in the 2020 starvation death of his 6-year-old son.

2 hours ago

Former President Donald Trump sits in a courtroom next to his lawyer Todd Blanche before the start ...

Associated Press

Trump hush money trial enters new phase after defense rests without testimony from former president

Donald Trump's hush money trial is now closer to the moment when the jury will begin deciding the former president's fate.

2 days ago

UoA student convicted of first-degree murder after killing professor...

Associated Press

Former Arizona grad student convicted of first-degree murder in 2022 shooting of professor

A former University of Arizona grad student was convicted of first-degree murder after fatally shooting a professor on campus two years ago.

2 days ago

Rudy Giuliani bankruptcy filing defamation lawsuit...

Associated Press

Ex-NYC Mayor Rudy Giuliani, Arizona’s Kelli Ward plead not guilty in fake elector case

Giuliani appeared remotely for the arraignment that was held in a Phoenix courtroom. His trial will take place in October.

2 days ago

President Joe Biden gestures after speaking to graduating students at the Morehouse College commenc...

Associated Press

Biden tells Morehouse graduates that scenes in Gaza from the Israel-Hamas war break his heart, too

Joe Biden on Sunday offered his most direct recognition of U.S. students' anguish over the Israel-Hamas war.

4 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s how to be worry-free when your A/C goes out in the middle of summer

PHOENIX -- As Arizona approaches another hot summer, Phoenix residents are likely to spend more time indoors.

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

Delta hikes Q2 revenue outlook on sharply higher airfares