Key Highlights

  • Delta upgraded its Q1 revenue forecast to “high-single-digit” growth from the previous 5%–7% projection
  • Adjusted earnings guidance remains at 50–90 cents per share for the quarter
  • Jet fuel costs have climbed over 50% following U.S. and Israeli military action against Iran in late February
  • DAL shares gained approximately 3.6% during premarket hours Tuesday, following Monday’s 3.5% increase
  • Southwest Airlines has declined 26% while United Airlines dropped 21% since Middle East tensions escalated

Delta Air Lines improved its revenue expectations for the first quarter on Tuesday, despite ongoing jet fuel price increases linked to Middle East conflict. Shares advanced 3.6% before the market opened.

The Atlanta-based carrier revised its Q1 revenue growth forecast upward to a high-single-digit percentage. This represents an improvement over the 5% to 7% growth range provided in January.


DAL Stock Card
Delta Air Lines, Inc., DAL

The company maintained its adjusted earnings per share outlook at 50 to 90 cents for the three-month period. Delta indicated that both consumer and corporate travel demand patterns have strengthened as March progresses.

Management attributed the enhanced revenue projection to “demand momentum.” The carrier emphasized its strong positioning to manage current market conditions and stated it would modify capacity plans should fuel costs remain at elevated levels.

Jet fuel expenses have increased more than 50% since coordinated U.S. and Israeli strikes targeted Iran in late February. Current trading ranges sit between $150 and $200 per barrel, compared to approximately $100 before hostilities began.

Fuel expenses account for roughly 20% to 25% of airline operational costs, ranking as the second-largest expenditure category behind labor. The dramatic price increase has created significant headwinds across the aviation industry.

The airline sector has faced considerable selling pressure since conflict erupted. Southwest has fallen 26%, United declined 21%, American dropped 20%, and Delta stands 14% lower — despite Monday’s rally as crude oil prices retreated.

Southwest’s performance makes it the second-worst stock in the S&P 500 during this timeframe, trailing only Ulta Beauty.

JPMorgan Conference in Focus

The four largest U.S. airlines — Delta, United, Southwest, and American — are scheduled to present at the JPMorgan Industrials Conference in Washington on Tuesday. Investors anticipate potential updates to first-quarter projections or annual guidance.

Delta submitted its conference materials ahead of schedule. This early filing gave market participants time to review the updated figures before trading commenced.

United Airlines CEO Scott Kirby indicated last week that he anticipates a temporary fare spike followed by stabilization, according to The Wall Street Journal. He highlighted that United recorded its highest-ever single-day booking volume last Monday.

German airline Lufthansa has independently confirmed a notable increase in long-distance travel demand since tensions escalated, suggesting persistent consumer appetite for air travel despite geopolitical uncertainty.

Can Airlines Pass on Fuel Costs?

The primary concern for investors centers on whether carriers can successfully offset elevated fuel expenses through ticket price increases. UBS analyst Atul Maheswari noted in a Sunday research report that market participants will carefully monitor airline management commentary regarding their ability to transfer fuel costs to customers.

Successful fare increases require sustained passenger demand. Current demand indicators appear relatively robust.

One potential risk looms over the industry. Airlines might withdraw annual guidance, similar to their response in April of last year after President Trump announced comprehensive tariff policies.

Delta maintains approximately two weeks of fuel inventory, providing short-term insulation. The adequacy of this buffer depends entirely on the duration of elevated price levels.