Delta says fare increases meeting little customer resistance

Delta Air Lines reported 16% revenue growth for the quarter ended 30 September. The carrier said that helped offset persistently high fuel costs, which cut sharply into overall profit. Executives said airfares have risen by less than inflation in the wider economy, making it easier to pass higher fuel expenses on to passengers.

Chief executive Ed Bastian said the customer response has been encouraging. He pointed to what he described as limited resistance, and said the airline's product is still viewed as reasonably affordable within a consumer basket even at a 20% price increase.

Premium cabins drove much of the quarter's growth. Front-of-plane products brought in $6.82 billion in revenue, up 18% year on year, narrowly ahead of main cabin revenue of $6.80 billion, which rose 12%. Bastian said the airline's position is sustainable. Loyalty, corporate sales and maintenance services also grew, according to the carrier.

The airline lowered its full-year profit outlook. It now guides to earnings per share of $5.10 to $5.60, down from above $6.50 previously. Delta was the first carrier to report third-quarter financial performance, and plans 3% capacity growth through the end of the year.

Chief commercial officer Joe Esposito said corporate demand has been resilient. Delta intends to keep selling premium seats while the industry watches load factors and yields closely in a high-cost environment. Air travel demand in North America fell 2.1% year on year in August while capacity rose 2.8%, according to IATA figures.