Jet fuel was Delta's biggest expense last year. The run-up in fuel costs that began in the fall prompted the big airlines to begin raising fares in December. On Thursday, Delta President Ed Bastian said they aren't done.
"We're going to need to continue to raise ticket prices to cover that cost" if jet fuel remains around $2.75 per gallon, Bastian told analysts. That's 11 percent higher than the $2.47 per gallon Delta paid in the fourth quarter.
Delta also cut its growth plans. It had previously expected to increase first-quarter flying by 5 percent to 7 percent. On Thursday it said growth would be 3 percent to 5 percent.
Bastian said the smaller increase was a combination of weather -- storms last month caused thousands of cancellations -- and a planned response to fuel prices.
And Bastian said 2011 flying would probably rise just 1 percent, versus an increase of 1 percent to 3 percent that Delta announced just over two weeks ago.
High fuel costs also prompted Delta to slice $300 million from its planned spending this year on big-ticket items such as used aircraft. The cut will allow Delta to keep generating as much cash as it had planned, Bastian said.
Delta has also been retiring 50-seat regional jets. The small jets cost more to fly per passenger than larger planes because they don't spread the fuel costs over as many people.
Wall Street has been eager to see airlines aggressively raise fares and cut capacity in response to rising fuel prices. The industry has a reputation for failing to pass along higher costs to customers, and for adding too many flights, driving down prices.
Shares of Delta Air Lines Inc. rose 38 cents, or 3.3 percent, to $11.73 in afternoon trading.
