Delta Air Lines hit by rising fuel prices
(CNN Money) — Higher fuel prices are hurting Delta Air Lines.
Delta warned investors on Tuesday that its second-quarter profit will be lower than it originally projected. The airline paid about 6% more for fuel than in the previous quarter as the price of oil climbed.
Oil production has collapsed in crisis-stricken Venezuela, and the Trump administration is stepping up sanctions on Iran, insisting that other countries stop importing its oil. US crude hit $75 a barrel on Tuesday for the first time since 2014.
Strong demand for travel has allowed airlines to raise fares, limiting the hit. Delta said a key measure of fares was 4% to 5% higher in the quarter than a year earlier.
Shares of Delta, American Airlines and United Continental fell slightly in early trading on the profit warning. All ended the day lower.
Delta said travel demand remains strong, helping its results. Paying passengers flew 3.2% more miles. Delta also said it has controlled costs other than fuel, keeping the increase in those expenses to about 3%.