Delta Air Lines CEO Warns of Sustained High Airfares

Delta Air Lines’ CEO, Ed Bastian, cautioned travelers on Friday that airfare prices might stay elevated, even with a drop in oil prices from recent highs. He expressed hope that this would help the airline meet its profit targets for the year.

When discussing high ticket prices with CNBC, Bastian noted that strong travel demand and more seating options contribute to what he believes is a sustainable pricing trend. He seemed hesitant to rapidly increase capacity as oil prices decline, referencing past experiences in the industry.

Although domestic and international airfares have seen a decrease in recent weeks after peaking in April and May, travelers are still paying significantly more for flights than they did last year. Factors like the Iran conflict have made jet fuel pricier, doubling operating costs for major airlines.

Recent data from Kayak revealed that the average domestic ticket price hit $366 last week, which is 38% higher than the same time last year. On the international front, the average ticket price came in at $919. While it dipped below the $1,000 mark, it still represents a 24% increase from 2025 prices.

The Atlanta-based airline upheld its full-year earnings forecast of between $6.50 and $7.50 per share, anticipating that airfare prices will keep rising. For the third quarter, Delta projected earnings of $2 to $2.50 per share, surpassing analysts’ expectations of $2.02.

Delta recently released its second-quarter results, reporting adjusted earnings per share of $1.56, which exceeded predictions of $1.48, alongside revenue of $17.67 billion, surpassing expectations of $17.53 billion.

Bastian stated that Delta, recognized as America’s most profitable airline, has thrived by focusing on higher-income customers within a K-shaped economy, where wealthier Americans continue to spend freely while lower-income individuals are tightening their belts.

In the second quarter, revenue from premium seat sales amounted to $6.92 billion, while main cabin sales brought in $6.85 billion. The airline aims to leverage the demand for premium products by introducing more seating opportunities.

This week, Delta also introduced “base fares” for first class and business-class seats. These business seats, while still economy, come with benefits typically reserved for Delta members.

Bastian pointed out that strong demand linked to events like the World Cup and a rise in corporate travel significantly boosted profits.

Jet fuel constitutes a substantial part of airline operating costs, and prices have surged globally due to the Iran conflict, which has caused significant energy supply disruptions.

In response, airlines are cutting routes, particularly long-haul flights that consume more fuel, while also raising airfares. They’ve also introduced additional charges for services like checked baggage and seat assignments.

Despite this, industry leaders indicate they haven’t fully transferred the increased fuel costs to consumers yet. Bastian mentioned that Delta is currently passing about 60% of these additional costs to passengers, but aims to reach full transmission this quarter.

Delta’s revenue per empty seat mile—basically, how much profit it makes per occupied seat—rose 17% year over year in the second quarter, but the cost per available seat mile increased by 21%.

While net income fell 25% year over year to $1.66 billion (or $2.44 per share), operating revenue still grew by 19% to $19.76 billion.

Besides airfare, Delta has additional revenue streams including cargo services, fuel refining, and maintenance and repair operations.