Delta Air Lines Warns Iran War Could Add $2 Billion in Fuel Costs
Key Takeaways
- Delta projects more than $2 billion jet fuel costs in Q2 due to Iran war.
- Delta's Q1 fuel costs rose by $332 million.
- Delta will remove all planned capacity growth for the June quarter.
Fuel Costs Surge
Delta warned that jet fuel prices linked to the Iran war could add $2 billion to second-quarter costs.
“Delta Air Lines says high jet fuel prices could cost it an extra $2 billion in the second quarter, as the Iran war continues to have global economic impact”
Delta's first-quarter fuel bill jumped by $332 million as average US jet fuel prices more than doubled.
Delta will remove all planned capacity growth from the June quarter, cutting supply by about 3.5 percentage points.
Delta also joined JetBlue and United in raising checked bag fees.
Impact on Industry
Fuel typically accounts for about a quarter of airline operating costs.
United Airlines will cut about 5 percent of planned short-term flights.
The fuel spike is the industry's first major post-pandemic stress test.
Cost pressures are impacting ticket prices and capacity decisions.
Delta's Financials
Delta reported stronger-than-expected first-quarter earnings despite fuel pressures.
The airline owns a refinery, giving it some cushion.
Bastian said it is unclear when customers will adjust to higher prices.
The fuel surge is a direct consequence of the Iran war.
More on Iran
US-Iran Two-Week Ceasefire Reached, Trump Declares Total Victory
28 sources compared
Strait of Hormuz Remains Closed Post-Ceasefire As Hundreds of Ships Are Stuck
20 sources compared
US-Iran Two-Week Ceasefire Opens Strait of Hormuz at 12% Capacity
18 sources compared
Two-Week Ceasefire Between US-Israel and Iran Begins Amid Regional Chaos
18 sources compared