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Delta Continues to Adjust to Unprecedented Fuel Costs with Addition of Fuel Surcharge

Delta Continues to Adjust to Unprecedented Fuel Costs with Addition of Fuel Surcharge

 
Old Jun 25, 08, 8:12 pm
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Delta Continues to Adjust to Unprecedented Fuel Costs with Addition of Fuel Surcharge

Read on a Disney forum that Delta is planning on implementing Monday a $50pp each way fuel surcharge...anyone hear this as well???
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Old Jun 25, 08, 8:26 pm
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Welcome to Flyertalk, 49holding. There is a dedicated Forum for Delta (see Airline Programs). I am moving your thread to the Delta Forum, where I trust that the Delta Flyers will be gracious and helpful..
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Old Jun 25, 08, 8:50 pm
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It will probably in the form a fare increase.
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Old Jun 25, 08, 8:54 pm
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$50 is huge?
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Old Jun 25, 08, 9:00 pm
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Yeah $50 each way is huge for me. Its huge for a family of 5 traveling..I am flying next month and am paying on JB $334 RT when I usually pay $148 to $210 RT, so if next on top of the escalalting airfares there is a fuel surcharge, then its time to go to plan B ( whatever plan B is )
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Old Jun 25, 08, 9:13 pm
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Well, you also could choose to go Amtrak, Greyhound or drive. The bottom line is that the cost of fuel is high and we all have to pay for it if we want the product. Enough airlines are going out of business, cutting back and furloughing staff. They have to charge for the added fuel costs!
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Old Jun 25, 08, 9:34 pm
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Has anyone else heard about this from any other source than a Disney forum? If DL does this will it apply to tickets purchased prior to Monday? I know fuel prices are high but this is an additional $100 to every ticket I purchase. If I can purchase tickets before Monday without a surcharge I think I should probably figure out what we will be doing for the rest of the year and buy my tickets now.

It just seems a bit more dramatic than I think the circumstances warrant. Yes, I know that fuel prices are up, and yes it costs me twice as much to fill my car as it did two years ago, but why wouldn't DL do what every other business is doing and just increase fares to cover fuel costs. It seems a little unfair to put a $100 sur-charge on my trip between JAX-ATL, and put that same surcharge on a flight from ATL to SEA. I think it would be much more fair to have the people who are consuming the fuel pay for it.
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Old Jun 25, 08, 9:44 pm
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Originally Posted by 49holding View Post
Yeah $50 each way is huge for me. Its huge for a family of 5 traveling..I am flying next month and am paying on JB $334 RT when I usually pay $148 to $210 RT, so if next on top of the escalalting airfares there is a fuel surcharge, then its time to go to plan B ( whatever plan B is )
By JB I assume the poster is referring to JetBlue (B6), not Helijet Airways (had to look that one up). Unless that seat wasn't going to be sold I don't see how B6 made money selling a roundtrip fare for $148 or $210. Likely they gained some market share doing so but even with oil below current levels that's not going to cover the costs of the flight. Having gotten the infrequent flyer accustomed to $148 roundtrip fares is going to make this transition period painful.

Plan B is to cut routes and capacity, increase fares and see what the market will tolerate. After that follow mergers and bankruptcies where carriers actually stop flying.

I'd suggest a mini-van for your plan C.
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Old Jun 26, 08, 3:08 am
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Those of us based in Europe are already whacked with a $200+ Delta surcharge on both revenue and AWARD tickets trans-Atlantic. Someone at the revenue desk at DL told me a few months ago that they intended to take this systemwide eventually. Maybe ''eventually'' will arrive on Monday.

While I have managed to burn all but about 80K of the miles I had accumulated in my years as a DL Gold Medallion, I am outraged that these DL pirates are hellbent on capturing my NW Worldperks miles and subjecting them to the same fraud on their customers.

Fuel is an integral part of the basic product. Airplanes do not fly without it. the only honest way to include increases in fuel costs is to raise the base fare, not play dishonest shell games with ''fuel surcharges''.
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Old Jun 26, 08, 6:27 am
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None of the USA-based legacies will announce a hike in fuel surcharges until just before the deed is one, or at some time thereafter, lest they be accused on signaling.
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Old Jun 26, 08, 6:45 am
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Airlines are such a bunch of boobs these days. Everybody knows operating expenses (mostly fuel, but other things can be fuel-inflated as well) are skyrocketing. We understand, I promise. Just raise fares, and dump these idiotic fees and surcharges!!! I have no problems with things like BOB, etc., but resent being forced to pay specifically for fuel, or checked bags when that should be already worked into the fares the airlines are willing to let these seats go for.

Those watching the (U.S.) airline industry have said that a contraction is necessary. Well, raising fares would accomplish that end. Fewer people will fly, thus fewer a/c will be necessary. Plus, I would imagine, the airlines would actually stand to make $ from the pax who do continue to fly.

Last edited by gsupstate; Jun 26, 08 at 6:50 am
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Old Jun 26, 08, 6:54 am
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A bit more info would be good.......is this domestic or international, across the board or based on trip length. In any event, if this is not matched it will probably not last, and I don't see how it can be applied to tix purchased before it is announced.
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Old Jun 26, 08, 7:36 am
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It would be difficult (if not impossible) for any airline to apply fuel surcharges to already purchased tickets.

Regardless of what some think, it would also be difficult (if not impossible) to apply a significant fuel surcharge (that may exceed the price of the ticket) to domestic purchased tickets. The current competitive environment in the U.S., unlike Europe, would not support $200 fuel charges. I don't care what some yahoo at the "revenue desk" said...
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Old Jun 26, 08, 9:54 am
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I have been googling and all I see is:

Northwest's fuel charge one way went up to 165.00 on June 10.

All Nippon and Japan Airlines are going up on tickets purchased on/after July 1 to 253.00 each way.

Haven't found anything about Delta yet.
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Old Jun 26, 08, 10:02 am
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Found this: http://www.etravelblackboard.com/sho...nav=2&id=79124

Delta Airlines Responds to Record Fuel Prices
Wednesday, 25 June 2008


Delta Airlines President and CFO, Edward H. Bastian has provided an update on the company’s efforts to fight rising fuel prices and its ongoing approach to building a sustainable, profitable business model.

“Delta has been a first-mover to aggressively respond to the challenges facing our industry with domestic capacity cuts, associated cost reductions, and a focus on preserving liquidity,” Mr Bastian said.

“These actions combined with our game-changing merger with Northwest are positioning Delta for long-term success as a strong competitor against any airline around the globe.”

Delta Airlines has been able to successfully realign its network to rationalize domestic capacity while expanding globally.

This means that Delta’s revenue per available seat mile has improved from 86 percent of industry average in 2005 to 102 percent of industry average through the first four months of 2008.

International flying continues to be a strong component of the carrier’s business plan with Delta services continuing to fly to five continents and 20 new international routes this year. This in turn means that airlines international capacity for 2008 is expected to be up 15-17 percent.
In response to rising fuel costs, the company is adding to previously announced plans to reduce domestic capacity by 10 percent year over year in the second half this year and now plans for total domestic capacity reductions of 13 percent in the second half of 2008.

As previously announced, Delta plans to remove the equivalent of 15-20 mainline and 60-70 regional jet aircraft from its operation by the end of 2008.

While capacity reductions have resulted in some market cancellations, most are being made through frequency and point-to-point reductions, as well as seasonal adjustments.

“The diversity of Delta’s network has provided the financial balance we need to counteract the soft U.S. economy and tough fuel environment. International routes continue to be a boon for us as we carefully manage domestic capacity. While it’s important to maintain a broad domestic presence for our customers and employees, as well as to feed international routes, we remain flexible and will make additional adjustments if needed,” said Mr Bastian.

Delta in December began adjusting domestic capacity in light of record fuel costs. Previously announced route cancellations have included service between Orlando and cities such as Las Vegas; Fort Lauderdale, Fla.; and Little Rock, Ark., as well as nonstop flights between Boston and cities such as Charleston, S.C. and Greensboro, N.C.

While a small number of additional market cancellations are expected as Autumn schedules are finalized, most reductions are being achieved through frequency reductions and by eliminating a number of unprofitable routes with particular focus on point-to-point flights that can more profitably and efficiently be served via Delta’s hubs.

As part of Delta’s commitment to both provide employees with flexibility and remove costs associated with capacity reductions, the airline in March was the first U.S. carrier to announce voluntary retirement and early out programs for employees.

As more than 4,000 Delta and Delta Technology employees elected to participate in the programs, the airline is positioned to achieve cost reductions associated with capacity pull downs.

Delta expects a profitable June quarter excluding special items, and expectations remain in line with previous guidance. Despite a $4 billion increase in fuel costs in 2008, the airline’s liquidity remains strong thanks to a solid operating cash flow, controlled capital expenditures and aggressive fuel hedge program.

The airline expects to end 2008 with $3.2 billion in unrestricted liquidity, down just $600 million from Dec. 31, 2007.

Delta’s aggressive, multiyear fuel hedge strategy is expected to offset nearly $1 billion in fuel cost impact for 2008 and continue to provide benefits in years to come. The airline’s hedge portfolio through 2010 is currently valued at approximately $1.5 billion.

Delta continues to focus on the proposed merger with Northwest Airlines to create a global airline better positioned for strength and profitability on a long term basis.

“The unique advantages created by the combination of Delta and Northwest are even more compelling as fuel costs continue to rise,” Mr Bastian said.
A merger of strength, the airlines will combine best-in-class cost structures, industry-leading balance sheets and complementary networks.

Delta and Northwest expect to find opportunities to both reduce one-time costs and increase synergies through the merger which is expected to receive approval by the end of the year.

Delta Air Lines operates service to more worldwide destinations than any airline with Delta and Delta Connection flights to 324 destinations in 62 countries. Delta has added more international capacity than any major U.S. airline during the last two years and is the leader across the Atlantic with flights to 43 trans-Atlantic markets.

To Latin America and the Caribbean, Delta offers 600 weekly flights to 62 destinations. Delta's marketing alliances also allow customers to earn and redeem SkyMiles on more than 16,000 flights offered by SkyTeam and other partners.
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