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Several U.S. carriers, including United Airlines and Southwest Airlines (NYSE:LUV), have warned surging fuel costs are hurting their bottom-line in the current quarter following a rise in oil prices due to extended production cuts.
U.S. airlines do not generally hedge against fuel costs, making them vulnerable to price swings.
Atlanta-based Delta Air Lines raised its forecast for fuel prices to between $2.75 and $2.90 per gallon in the third quarter from its prior estimate of $2.50 to $2.70.
The carrier now expects third-quarter earnings per share to range between $1.85 and $2.05, compared with its prior expectations of $2.20 to $2.50 per share.
Delta’s shares were up 2% in premarket trading.
