• 1 day PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 1 day Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Oil Markets Fear Iraqi Escalation

Oil Markets Fear Iraqi Escalation

The military operation by Iraqi…

Controversial Azeri Pipeline Receives $500M Funding

Controversial Azeri Pipeline Receives $500M Funding

The European Bank of Reconstruction…

James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

More Info

Delta Air Lines Plans To Trim Capacity Growth And Hike Fares

Delta Airlines

In the second part of the year, Delta Air Lines aims to boost its fares as it faces rising fuel costs and barriers to revenue.

Delta Air Lines presented its investors some new strategies for the second part of the year that will trim its capacity growth plan—a plan that eventually could end with higher fare prices.

According to Delta, it hopes to become “the first network carrier to return to positive unit revenue growth later this year.”

Related: Oklahoma Oil Industry About To Lose Tax Rebates

The airline says it's delaying previous plans to expand its business, partly because it wants to stop airfare prices from falling. It also announced it will cut its plans to add new flights in the second half of the year as it hopes rebalance the supply and demand equation.

Fuel prices are up more than 60 percent from the lows experienced earlier this year, although fuel is still much cheaper than a year ago.

Airlines lowered airfares and increased capacity due the depressed oil prices, but so far, that pressure hasn’t really resulted in good news for travelers, as airlines are yet to pass these savings along to the consumer. Last year, airfares were only slightly lower than the previous year.

Related: Oil Edges Higher Ahead Of Weekly Inventory Report

According to a U.S. Department of Transportation report published earlier this month, U.S. airlines raked in a profit of $25.6 billion last year, a 241 percent increase from 2014.

Companies also made significant savings as the drop in oil prices saw U.S. airlines spend some $27 billion on fuel in 2015—38 percent less than in 2014. Fuel prices averaged 35 percent lower in 2015 than the previous year. For the 25 airlines with scheduled passenger service, total operating revenue last year was slightly lower at $168.9 billion, down from $169.3 billion in 2014.

Related: Did The Saudis Exaggerate Their U.S. Treasury Holdings? 

Airlines are locking in cheap oil for the next few years, taking advantage of what could end up being a temporary period of low prices. Some of the largest airlines are stepping up their hedging programs in a big way for the first time since prices started to collapse in mid-2014. In early April, several airlines secured hedges for oil for 2017, 2018, and even 2019, although the exact companies were not disclosed.

Delta also announced on Monday that it is raising its quarterly dividend 50 percent. Delta’s stock has risen from $42.35 on May 12 to $44.18 on news of increased dividends and its plan to limit capacity growth.

By James Burgess of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News