By Rajesh Kumar Singh and Shivansh Tiwary
March 17 (Reuters) – U.S. airlines on Tuesday reported stronger‑than‑expected travel demand heading into the spring, supporting higher fares and revenue growth, even as a surge in jet fuel prices linked to the Iran war has pushed operating costs higher.
Delta Air Lines consumer and corporate demand accelerated into March, prompting it to raise its March‑quarter revenue guidance and affirm that earnings would land within its initial forecast range.
The Atlanta‑based carrier said sales over the past week rose about 25% from a year earlier, reflecting broad‑based strength across corporate travel, international routes, premium leisure and the domestic main cabin. It also reported recording eight of the 10 highest sales days in its history this quarter, including five that occurred this month following the start of the war.
“The story for us in this quarter is about revenue demand and the health of the demand set,” Chief Executive Ed Bastian said at a J.P. Morgan industrial conference.
Delta now expects first-quarter revenue to grow at a high-single-digit percentage, compared with its earlier forecast of 5% to 7%. It had forecast adjusted profit per share in the range of 50 cents to 90 cents.
Delta’s shares rose 3.55% in premarket trading.
Similarly, JetBlue said demand has strengthened across peak and non‑peak periods and across both premium and core cabins, though winter weather cut capacity and increased costs.
Budget carrier Frontier Airlines on Tuesday also slightly narrowed its quarterly loss forecast, as strong demand helped offset the spike in jet fuel prices.
Rising jet fuel prices have pushed up operating costs for airlines, with prices up more than 50% since U.S. and Israeli strikes on Iran in late February. Fuel is the industry’s second‑largest expense after labor, typically accounting for between a fifth and a quarter of total operating costs.
Prices have recently traded in a range of $150 to $200 per barrel, compared with around $100 per barrel before the war. Iranian strikes across the major oil‑producing region have disrupted supplies and forced the closure of key shipping routes, adding to market volatility.
U.S. airlines are particularly exposed to the surge, as most do not hedge fuel costs, unlike some European and Asian carriers that use hedging to cushion against price shocks.
Bastian said jet fuel prices have “almost doubled since the start of the year,” citing a $400 million increase in fuel costs in March alone, but added that the industry is moving quickly to recoup higher expenses through fare hikes.
He said industry pricing has risen twice in the past two weeks and that Delta is well positioned as carriers seek to recover fuel costs, with flexibility to adjust capacity if elevated prices persist.
(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary and Nathan Gomes in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski)
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