Delta overcame rising oil prices by hiking fares

Profit up $127 million in third quarter

Delta Airlines via CNN

NEW YORK (CNN Business) - Hurricane Florence and higher fuel prices proved no big deal for Delta Air Lines. Profit grew after the company raised fares and sold more seats on its planes.

The airline said fuel cost it $655 million more in the third quarter than a year earlier -- as fuel prices rose 37 percent. And disruptions from Hurricane Florence cost it another $30 million.

But Delta's profit was still up $127 million in the quarter. That's because the average amount paid by passengers to fly each mile rose by 4 percent, and the number of miles traveled by paying customers also rose 4 percent. Together that lifted sales by $892 million, offsetting the hit from fuel.

The airline said it expects more of the same in the final three months of the year. Fuel prices are again expected to be up 30 percent from a year earlier. But the airline said that fares should also be up between 3 percent to 5 percent from last year.

Delta is the first major U.S. airline to report its third-quarter finances and is something a bellwether for the industry. The fare results and guidance were particularly good news for airline investors, if not for passengers.

Shares of Delta (DAL) rose 2 percent in premarket trading and the report and shares of industry leader American Airlines (AAL) were also higher, even as other market indicators pointed to a lower open for stocks overall. Most of the other major airline stocks were little changed in the early going.

Copyright 2018 by CNN NewSource. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.