Delta's Bastian says higher airfares could outlast the fuel price spike that drove them

Delta Air Lines CEO Ed Bastian says higher airfares could prove sticky, potentially persisting even if the jet fuel costs that helped push ticket prices up in the first place eventually ease, so long as consumer demand for travel remains as resilient as it has been.

The remarks come after a sharp run-up in fuel costs this year. Jet fuel prices have more than doubled compared with a year earlier, and Delta's own fuel costs jumped roughly 60 percent in the third quarter, adding an estimated $1.6 billion in expense. The spike traces largely to the conflict involving Iran, which disrupted oil flows through the Strait of Hormuz, a corridor that normally carries a significant share of the world's oil, pushing benchmark crude prices up sharply over the past year.

Delta has passed much of that added cost on to passengers. The airline said it passed through roughly 60 percent of higher fuel costs in the second quarter, with that share climbing toward nearly the full amount by the third quarter. Average domestic airfares reached $445.26 in the second quarter, up roughly 23 percent from a year earlier, while revenue per available seat mile rose about 15 percent, reflecting both stronger demand and the higher prices airlines have been able to charge.

Despite that pricing power, Delta cut its full-year profit guidance and missed earnings estimates for the first time in two years, even as revenue held up. Executives across the airline industry have pointed to a healthy labor market and sustained consumer preference for travel as the reason fares have stuck despite the jump in costs, a dynamic Bastian's comments suggest could keep airfares elevated well beyond whenever fuel prices eventually retreat.