Delta sees return to profit as travel demand takes off

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STORY: Delta Air Lines forecast a return to profit this quarter as travel demand has taken off, lifting the company's shares higher on Wednesday.

Delta also posted a smaller-than-expected loss for the last quarter and said strong bookings helped it offset soaring fuel costs with higher fares.

CEO Ed Bastian told Reuters that demand was "at a historic high," saying "the last five weeks have been the strongest period of bookings that Delta has ever seen."

The results boosted shares of other airlines, including American and United, which both report results next week. Shares of American climbed as high as 10% Wednesday morning.

But a run-up in fuel prices and rising wages are also driving up the airline industry's operating expenses.

Delta said its fuel bill last quarter was 33% higher than the quarter before and is expected to get more expensive.

To compensate, Delta has hiked ticket prices sharply.

Airline fares were among the biggest contributors to a jump in U.S. consumer prices and some analysts are concerned that higher fares and rising inflation could ​eventually hurt travel spending.

But Bastian said that while the industry needs to watch the overall health of consumers, travel demand is expected to remain "very healthy and strong" through the summer.