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Yes, I'm very pleased to be in Napa Valley. It's a tough life for some at the Consuelo Sparks Summit here with Ed Bastian, the CEO of Delta. And this entire event is about leadership. And boy, are we being confronted for moments of leadership right now. Two leaders of the world, the two key economies meeting at the moment. And I'm interested as to how you see US-China and whether it impacts your business very much.
First of all, thank you for having me. And it is fabulous to be out here. I think it's on everyone's top of mind right now. In our business, in transportation, it's actually interesting. It's the one market of the world where travel has actually has not returned to post-COVID levels. In fact, it's less than half of what it had been because the two countries, not just economies, have been decoupling a little bit. And so, it's so important the fact that we have our leaders of both countries together talking about how we can start back again, start building trust, and creating better relationships.
Now, that coupling in many ways, the conversation has been around a geopolitical moment of anxiety when it comes to conflict in the Middle East that has big implications for your business.
Now, can you remind our audience, TV and radio, how much you've seen jet fuel increase for the business? And how you've managed to weather it because you put plans in place over the years that you've been running this business to ensure that you can really weather such shocks.
Yeah, so several things. First, jet fuel prices have doubled just since the start of the conflict, over the last 30-60 days. We've had in at Delta over $2 billion of higher cost in the current quarter. On a run rate basis, it's almost $10 billion a year. So, huge amount of money. The way we've managed that, first is building a brand that is resilient, that people understand fuel prices are up, we're going to have to find ways to cover it. We have a consumer base that is willing to pay a higher class. Now, we're not covering the whole thing, but in the current quarter we're expecting to cover relatively half of the increase in price in a relatively short period of time, which is pretty good. The second thing we did over a decade ago, we bought our own refinery on the East Coast in the Delaware River outside of Philadelphia called... And in this quarter alone, we expect to save somewhere between 2 and 300 million dollars of fuel cost, which is more than twice what we paid for it.
So, you're able to in many ways try to mitigate it for a consumer, but a consumer that you have very thoughtfully tailored yourself towards being more premium. Ultimately, how are you thinking about Delta leaning into that as we continue to see a remarkably resilient consumer's willingness to spend and to travel?
Well, there's several consumers out in the marketplace. People talk about the consumer. Our consumer is a higher-end consumer and is incredibly resilient. We have seen the demand strength right throughout the year. In fact, when the war started, it seemed like it even ticked up another notch. So, we're seeing significant growth and we're continuing to see significant growth in our business.
Notch? Like what? Suddenly people were like, I need to buy now?
I think there's a little bit of that. I think more important that people understand that typically when wars happen, people pull back and sit back. We've been through so much change, so much disruption. There's so many things coming at people. And I think some of this is the post-COVID effect. They'll say, 'I'm not going to sit and wait to see what the next headline's going to be. I'm going to go now. I'm going to go as long as I feel safe and be willing to invest in myself, invest in our experience, see the people in the places I need to be at.'
You've been willing to invest in even new routes just in the last week or so announcing that you're going to be going to certain parts of Europe. So, transatlantic routes because it's dining off a moment of sport and football, but how do you decide which routes are working for you right now, which ones you open, which ones you slow down on?
Well, our routes to the Atlantic to Europe are doing very, very well. Now, I would say exit Europe travelers point of sale into the US has been down a bit and that's a trend that we've seen for several years. But Americans specifically are going to Europe. We're launching just in the next week to Sardinia. We're launching to Malta. We're launching to Porto. Just three brand new routes for us in the midst of everything going on. So that tells you where the consumers want to be and who they are, they're principally Americans wanting to invest in their experiences.
We are with Ed Bastian, the CEO of Delta for our TV and radio audiences of Bloomberg. I'm interested in how you also invest in your people because you've actually increased wages in this inflationary environment at time where you're just saying you've got 2 billion more in cost of jet fuel. How tough is that to do for you or is it just a no-brainer?
