(Reuters) – Delta Air Lines on Thursday cut current-quarter forecasts for operating margins and profit, owing to increased fuel expenses amid supply cuts by Russia and Saudi Arabia.
Several U.S. carriers, including United Airlines and Southwest Airlines, 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.
(Reporting by Mehr Bedi in Bengaluru; Editing by Shweta Agarwal)
