Higher fuel costs continue to hamper earnings at Delta Air Lines despite strong revenue growth over the past three months.
Chief executive officer Ed Bastian said the airline would adjust its schedule in the second half of the year to reflect a potential $2 billion increase in operating costs for 2018 due to increased fuel prices. Costs are increasing in part because of President Donald Trump's decision to withdraw the U.S. from the Iran nuclear accord. He previously pressured the Organization of Petroleum Exporting Countries to ramp up their oil production.
"We have seen early success in addressing the fuel cost increase and offset two-thirds of the impact in the June quarter," he said in a statement. "With strong revenue momentum, an improving cost trajectory, and a reduction of 50-100 bps of underperforming capacity from our fall schedule, we have positioned Delta to return to margin expansion by year end."
The airline will focus its capacity cuts in markets where higher fuel costs cannot be offset with increased ticket costs, Delta president Glen Hauenstein told investors.
The carrier on Thursday said its revenue rose 8.2 percent to $11.2 billion for the quarter that ended on June 30. Net income, however, decreased 13.6 percent percent to $1 billion.
Bastion previously cautioned that ticket costs could also increase as a result of the higher fuel prices.
At the start of July, jet fuel topped $90.5 a barrel, a 51.4 percent increase over last year's price, according to the International Air Transport Association.