Delta Air Lines reported that its fares are up 11%-12% due to strong demand for travel, and the airline does not expect a decrease in fares despite a drop in jet fuel costs.

Strong Demand Keeps Fares High

According to Delta CEO Ed Bastian, airfares are a function of supply and demand, and the strong demand for travel will keep fares high. The airline’s premium passenger revenue was up 17% in the quarter, while main cabin revenue was up only 8%.

Bastian noted that Delta’s consumer is financially very healthy, with a tremendous amount of wealth accumulation, and travel is a top priority for these consumers. The airline’s surveys show that its core passenger base is willing to pay for travel, which will allow the airline to maintain its fares.

Fuel Costs Down, But Fares Remain High

Delta is projecting fuel costs in the current quarter will be down 20% from the adjusted fuel price it paid in the second quarter, as oil prices have retreated to near the levels they were before the US-Israeli war with Iran. However, the airline does not expect to pass the savings on to consumers in the form of lower fares.

Original reporting: El Paso News (HLL/CB) — read the source article.