Delta Airlines Faces Turbulence Amid Jet Fuel Price Surge

Delta Air Lines predicts lower-than-expected profits for the second quarter, largely due to increased jet fuel costs influenced by the Iran war. This has led Delta to adjust its capacity growth plans. A temporary ceasefire has provided slight relief, boosting Delta's stocks and those of its competitors.

Delta Air Lines has issued a warning on Wednesday regarding its anticipated lower-than-expected profits for the second quarter. The airline attributes financial strain to escalating jet fuel prices, driven by the Iran conflict. It joins other carriers in a struggle with elevated costs threatening the industry.

The Atlanta-based airline has removed all planned June quarter capacity growth, reducing supply by approximately 3.5 percentage points. This decision reflects Delta's cautious approach amid volatile fuel prices and uncertain market conditions, leading the airline to forecast a 'downward bias' in growth until the situation stabilizes.

Following a mismatch between rising fuel costs and ticket pricing, Delta expects its adjusted earnings to range between $1.00 to $1.50 per share in the June quarter. The company aims to mitigate fuel impacts through fare hikes, expecting to recover 40% to 50% of the increased expenses, although full recovery may take time.

(With inputs from agencies.)