Airline fees are here to stay for one specific reason, Delta Air Lines CEO Richard Anderson said Wednesday.
"Consumers want choice and consumers want to pay for their own desires in terms of how they specify a product, so I think you'll see a lot more unbundling not just in the airline business, but also in all consumer businesses," Anderson said on CNBC's "Squawk Box."
This trend has led the airline giant to add a fare cheaper than its economy fare called "basic economy," Anderson added. However, these cheaper tickets are nonrefundable and will not provide assigned seating.
Anderson made his remarks after the company announced a new $5 billion buyback program and increased its quarterly dividend by 50 percent to 13.5 cents.
He also said the company's higher levels of free cash flow led to the stock buyback. "We will be in the top 10 for free cash flow among the S&P industrials," Anderson said. "We will be ahead of the railroads and names like John Deere."
Delta shares were up more than 2½ percent in premarket trading Wednesday. Click here to see where the stock is trading now.