NEW YORK, March 17, 2026, 18:27 EDT.
Delta Air Lines bumped up its first-quarter revenue growth forecast on Tuesday, pointing to solid spring demand that’s countering a spike in jet fuel prices linked to the Iran conflict. American Airlines boosted its guidance as well, sparking a recovery in airline stocks following a rough stretch driven by rising oil costs.
Why’s that important? Carriers are seeing robust demand from March spill over into April and May, even with crude hovering close to $100 a barrel and Middle East turmoil still disrupting flights. The big question: If major airlines keep hiking ticket prices and travelers don’t blink, they might dodge the margin crunch that led to warnings about a potential travel slowdown earlier this month.
Jet fuel has surged over 50% since late February. European prices? They’ve doubled. In Asia, nearly an 80% jump. Fuel normally accounts for around 20% to 25% of airline operating expenses, but most U.S. airlines have stopped hedging — so they’re exposed to swings. As of Tuesday, Brent ended at $103.42 a barrel, with U.S. crude at $96.21.
Atlanta-based Delta reported a roughly 25% year-over-year jump in sales for the past week, pointing to strong demand from corporate travelers, international routes, premium leisure, and even domestic economy seats. “The story for us in this quarter is about revenue demand and the health of the demand set,” CEO Ed Bastian told the J.P. Morgan conference. Delta has now boosted its revenue growth outlook to a high-single-digit percentage, up from the previous 5% to 7% range. Reuters
Bastian flagged that jet fuel costs have “almost doubled since the start of the year,” which tacked on roughly $400 million to Delta’s March fuel bill. According to him, airlines have already raised fares twice over the past two weeks. If fuel prices remain high, Delta might cut back on less profitable routes. Reuters
American has lifted its first-quarter revenue outlook, now projecting growth of more than 10%, topping the previous estimate of 7% to 10%. But CEO Robert Isom said the airline’s fuel costs have climbed by roughly $400 million since the last update seven weeks back, thanks to pricier fuel. United, for its part, reported that bookings over the first 10 weeks of this year hit a record, with CEO Scott Kirby confident airlines could offset the full bump in fuel prices—“100% of that increase”—if demand keeps up. Reuters
Frontier dialed back its outlook, putting its full-year forecast under review. The airline now sees first-quarter jet fuel averaging $3.00 a gallon. Meanwhile, carriers across Europe and Asia have already bumped up fares, tacked on fuel surcharges, or trimmed routes as the fuel shock and airspace snarls ripple past the Gulf.
The threat from rising prices hasn’t gone away. Morningstar’s Lorraine Tan pointed out that if costs climb much more, “leisure travellers” might simply opt out. TD Cowen’s Tom Fitzgerald isn’t optimistic on margin expansion this year, unless energy prices plunge fast. Reuters
Operational pressures aren’t limited to fuel supply. On Tuesday, the United Arab Emirates shut down its airspace for a short period following missile and drone threats. Frankfurt airport reported 86,000 passengers hit by cancellations during the conflict’s first two weeks, leaving just a third of its regular Middle East flights operating.
Investors aren’t blinking at higher oil. Delta ended up over 6%, with American up 3.5% and United climbing 3.2%, as Wall Street stuck with the biggest airlines, betting they’ll manage to offset pricier fuel.
