Delta Air Lines hit by rising fuel prices
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 (DAL), American Airlines (AAL) and United Continental (UAL) all fell slightly in early trading on the profit warning.
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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%.
