Delta says fuel price surge will cause quarterly loss

Business

Fox Business 13 October, 2021 - 01:50pm 2 views

Quotes displayed in real-time or delayed by at least 15 minutes. Market data provided by Factset. Powered and implemented by FactSet Digital SolutionsLegal Statement. Mutual Fund and ETF data provided by Refinitiv Lipper.

This material may not be published, broadcast, rewritten, or redistributed. ©2021 FOX News Network, LLC. All rights reserved. FAQ - New Privacy Policy

FOX Business' Hillary Vaughn discusses how U.S. airlines are going green for a cost.

Delta Air Lines Inc. warned on Wednesday that rising jet fuel prices were likely to stunt the airline’s recovery from the COVID-19 pandemic. 

The Atlanta-based Delta sees fuel prices rising to $2.25 to $2.40 per gallon, up 40 cents from the September quarter. A 5 cent increase in the price of fuel equates to about $40 million in added expenses. The airlines spent $1.5 billion on fuel last quarter. 

Rising fuel prices "will pressure our ability to remain profitable in the December quarter," Delta CEO Ed Bastian said on the company’s third-quarter earnings call on Wednesday.  

He sees Delta posting a "modest loss" in the December quarter with crude oil prices up more than 60% year to date and 15% over the last month. The airline doe not hedge its fuel costs. 

Even with the near-term headwind from higher fuel costs, the company expects to return to profitability in 2022 as air travel continues to recover and capacity is restored. 

Delta on Tuesday reported a third-quarter profit of $1.2 billion, or $194 million excluding government aid and other items. It was the company’s first quarterly profit without including government aid since the outbreak of COVID-19.  

Delta shares were up 8.3% this year through Tuesday compared with the S&P 500’s 16% gain. 

This material may not be published, broadcast, rewritten, or redistributed. ©2021 FOX News Network, LLC. All rights reserved. FAQ - New Privacy Policy

Read full article at Fox Business

Business Stories

JCPenney