Delta hard hit by rising fuel costs

27th Apr 2011
Delta hard hit by rising fuel costs

Delta Air Lines has recorded a net loss of $318 million for the March 2011 quarter.

Driven by the $610 million impact of 30 per cent higher fuel prices, Delta’s net loss was $128 million worse than the March 2010 quarter, excluding special items. 

Consumers can now expect the costs to be transferred to ticket prices, with Delta chief executive Richard Anderson telling analysts high fuel prices were now “the norm”.

US crude fell slightly to $112.05 a barrel at close on Tuesday.

“Fuel is the biggest challenge facing this industry and Delta is actively reducing capacity, implementing fare actions, hedging our fuel needs and attacking our cost structure in order to offset fuel’s impact on our earnings,” said Anderson.

“These actions would not be possible without the dedication and determination of Delta people worldwide, who are working every day to build the best airline in the world for our shareholders, our employees and our customers.”

During the March quarter, Delta detailed its plan to adjust its business in response to rising fuel prices.

As part of that plan, the company will actively implement domestic fare increases and international fare surcharges as a means of passing through fuel costs to its customers.

Reduced its capacity plans for the second half of 2011, which resulted in a four point reduction in planned capacity. 

Delta will also retire 130 of its least efficient aircraft over the next 18 months.


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