Airlines raised fares as fuel costs surged, but Delta’s CEO says those higher ticket prices could be here to stay as long as demand holds up

Airfare has shot up this year partly because of the war in Iran.

But even if oil prices ease, higher ticket prices may be here to stay because travelers keep buying, said Delta CEO Ed Bastian.

The CEO of one of America’s biggest airlines said in an interview with CNBC Friday that he was surprised the airline’s profits held up despite a 60% jump in fuel prices, as demand for tickets stayed resilient.

In July, after the airline’s second-quarter results, Bastian told CNBC that Delta was passing along 60% of its higher fuel costs to consumers, and expected that to reach close to 100% in the third quarter.

“To not dent those profits, to me is incredible,” said CEO Ed Bastian in an interview with CNBC.

He added that the 60% increase in its jet fuel costs in the third quarter was a $1.6 billion increase.

“In past cycles, past shocks, if we saw a 60% increase in fuel prices, we’d be flat on our back.” The company last week reported $17.6 billion in adjusted revenue for the third quarter, a 16% year-over-year rise but just short of analysts’ $17.67 billion estimate.

While the company spent an adjusted 62% more than the same time last year in jet fuel, its revenue per seat mile—the measure of how much money an airline earns for each seat it flies one mile—went up 15%, reflecting higher fares and strong demand.

On the company’s third-quarter earnings call, Bastian credited consumers for helping the company maintain its profits, despite these price increases.

“Fuel has been the impetus for the industry to move quickly to adjust the pricing environment.

But given the fact that the market has accepted these price points,” and given that the company still views airfare as reasonably affordable, Delta’s position is very sustainable, he said.

“I think we’re going to be fine as you look forward.

Hopefully, we will see fuel recede into the next year at some point, and that’s when I think you’ll see the real earnings power of this franchise be amplified,” he said on the earnings call.

The continued strength in the airline sector comes as the average price for domestic trips hit $445.26 in the second quarter, according to the Bureau of Transportation Statistics .