June 27, 2018 / 6:19 PM / 22 days ago

Delta Air CEO says higher jet fuel to add $2 billion to costs

NEW YORK (Reuters) - Delta Air Lines (DAL.N) is expecting $2 billion in additional costs this year due to the swelling expense of jet fuel, Chief Executive Officer Ed Bastian said on Twitter on Wednesday.

FILE PHOTO: Ed Bastian, CEO of Delta Airlines at the 2016 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Dublin, Ireland, June 2, 2016. REUTERS/Clodagh Kilcoyne/File Photo

Earlier this month, Delta blamed a 50 percent annual rise in fuel costs for its decision to lower its second quarter profit forecast to between $1.65 and $1.75 per share from a previous estimate of up to $2 per share.

The rising cost of jet fuel already weighed on U.S. airlines’ earnings in the first quarter and prompted rival American Airlines (AAL.O) to cut its full-year profit forecast in April.

Atlanta-based Delta and its competitors are hoping strong demand, higher ticket prices and benefits from reductions in the U.S. corporate tax rate will eventually offset the impact of higher fuel prices.

Delta’s shares were down about 2 percent at $50.04 in afternoon trading, slightly underperforming a 1.5 percent decline on the Dow Jones U.S. Airlines Index .DJUSAR.

Reporting by Alana Wise, writing by Tracy Rucinski, editing by G Crosse and Tom Brown

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below