ATLANTA — Atlanta-based Delta Air Lines told investors on Wednesday that the company expects fuel costs to be $2 billion higher by June.
The news comes as conflicts in the Middle East continue to impact oil and gasoline prices across the globe and in the United States.
Due to the increased fuel costs, Delta said that June’s pre-tax profits were expected to be $1 billion.
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“Delta’s results underscore the power of our brand and the durability of our financial foundation,” Delta CEO Ed Bastian said in a statement. “We delivered earnings that were more than 40% higher than last year, even with a significant increase in fuel costs and operational disruptions across the industry. Our results are powered by the Delta people, who will always be our greatest competitive advantage. In February, we celebrated $1.3 billion in profit‑sharing payouts, similar to last year and more than the rest of the industry combined.”
Despite the change in financial forecast, Bastian said demand for Delta was still strong, but that the company was “taking actions to protect our margins and cash flow.”
Due to the increased fuel costs, Bastian said Delta will “meaningfully reduce capacity growth” until the situation improves.
“While the recent fuel spike is currently impacting earnings, I’m confident this environment ultimately reinforces Delta’s leadership and accelerates long-term earnings power,” Bastian said.
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