Delta Air Lines Raises Checked Bag Fees Amid Rising Jet Fuel Costs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy DAL?
Source: CNBC
- Fee Increase: Delta Air Lines has raised its checked bag fees by $10 starting Wednesday, bringing the first bag fee to $45 and the second to $55, while a third bag will cost $200, reflecting the airline's pricing strategy in response to rising fuel costs.
- Industry Trend: This increase marks Delta as the third major U.S. carrier to raise fees, following United Airlines and JetBlue Airways, indicating a broader trend in the airline industry facing pressure from soaring fuel expenses, with expectations that other carriers may follow suit.
- Surging Fuel Costs: According to Airlines for America, jet fuel prices in major U.S. cities have reached $4.69 per gallon, an increase of nearly 88% since the U.S. and Israel's attack on Iran on February 28, posing significant challenges to airline operating costs.
- Market Reaction Anticipation: Delta is set to report its first-quarter results before the market opens on Wednesday, and investors are likely to scrutinize how the company plans to manage the surge in fuel costs, with analysts noting that while strong demand may alleviate some pressure, it remains uncertain if airlines can fully offset the rising fuel prices.
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Analyst Views on DAL
Wall Street analysts forecast DAL stock price to rise
18 Analyst Rating
18 Buy
0 Hold
0 Sell
Strong Buy
Current: 68.080
Low
77.00
Averages
83.50
High
90.00
Current: 68.080
Low
77.00
Averages
83.50
High
90.00
About DAL
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company has hubs and markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Santiago (Chile), Sao Paulo, Seattle, Seoul-Incheon, and Tokyo. Its segments include Airline and Refinery. Its airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and includes its loyalty program, as well as other ancillary businesses. Its refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel as well as non-jet fuel products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Impact: As airlines raise ancillary fees to offset fuel costs, consumers are likely to face higher travel expenses, which could impact demand for air travel and alter overall market dynamics.
See More
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- Ceasefire Negotiations Tension: U.S. and Iranian negotiators are set to meet in Pakistan, and despite heated rhetoric, there remains a willingness to maintain the ceasefire, which could impact future energy supply and price stability.
- Global Economic Impact: China's factory-gate prices have risen for the first time in over three years, indicating the war's disruption of global energy markets, potentially leading to increased inflationary pressures for the Federal Reserve.
- Political Landscape Attention: The British Prime Minister expressed frustration over energy price volatility, highlighting the influence of international politics on domestic economies, which underscores the far-reaching effects of global political dynamics on markets.
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- Geopolitical Tensions: Iran's plan to charge shipping companies cryptocurrency tolls for passage through the Strait could provoke strong international backlash, increasing the risk of regional conflict.
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