Delta: Higher fuel prices drive expenses for 2Q2018

Delta Air Lines stated (12-Jul-2018) operating expenses for 2Q2018 increased USD1.1 billion year-on-year, with more than half of the increase driven by higher fuel prices. Adjusted fuel expense increased USD578 million, or 33%. Delta's adjusted fuel price per gallon for 2Q2018 was USD2.17, which includes USD45 million of benefit from the refinery. Cost pressures were driven by higher revenue-related costs and increased aircraft rent and depreciation associated with Delta's fleet initiatives. CFO Paul Jacobson stated: "We expect the sequential improvement in cost trends to continue in the second half of the year as we see additional benefits from our fleet restructuring, our One Delta initiatives, and annualisation of accelerated depreciation as well as prior investments in our product". Delta is positioning to expand margins by YE2018, as it looks to keep cost growth below 2% for 2018. [more - original PR] [more - original PR - II] [more - original PR - III]