Increased Fuel, Labor Costs Driving Rise in Airfares: Delta Air Lines

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As if flying isn’t frustrating enough, airfares are going up for the first time in years.

A Qantas A380 Airbus descends for landing while a Delta jet waits on a busy morning in 2009 at Los Angeles International Airport. (Credit: Mark Boster / Los Angeles Times)

Delta Air Lines said Thursday that its passengers paid higher fares on average in the second quarter for the first time in more than two years. It also forecast that fares will continue to climb.

The news follows guidance from American Airlines on Wednesday that it will report even steeper fare growth.

U.S. airlines have been struggling to raise fares in recent years, despite full planes. Low fuel costs had encouraged airlines to add additional flights. That increased competition and capacity in the system and put downward pressure on fares.

But strong demand for air travel, spurred by those low fares and steady job growth, means that airlines can finally start raising fares.

Delta said that passengers paid about 1% more to travel in the quarter, and that it expects its key measure of fares to rise an additional 2.5% to 4.5% in the current quarter.

The airline needed a boost in revenue to help cover higher costs. Fuel costs rose 18% compared to a year ago, and labor expenses rose 9% following a labor deal with pilots that was reached late last year that gave them significant pay hikes. Delta also said the April storms in the Southeast that forced it to cancel thousands of flights cost it $125 million.

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