Delta Earnings Forecast Cut Highlights Fuel Cost Squeeze on Airline ETF
Delta Air Lines (DAL) reduced its 2026 adjusted earnings forecast by nearly 25% after surging jet fuel prices raised its expected annual fuel bill by $6 billion compared with 2025. For the third quarter, Delta generated record adjusted revenue of $17.59 billion, up 16% year over year, supported by an 18% increase in premium and loyalty revenues. However, adjusted fuel expenses jumped 62% to $4.14 billion, pushing adjusted quarterly earnings down to $1.72 per share, missing market expectations.
Rising fuel expenses driven by conflict in Iran are squeezing profitability across the aviation sector despite steady travel demand and higher ticket pricing. The cost pressure threatens wider sector margins, impacting fund performance for industry products such as the U.S. Global Jets ETF (JETS). Delta also cautioned that carriers may need to exercise stricter capacity discipline and limit flight expansion in 2027 to protect profit margins.
Investors will gauge sector health as major carriers report third-quarter earnings later in October. United Airlines (UAL) and Alaska Air Group (ALK) are scheduled to report on October 20, followed by Southwest Airlines (LUV) on October 21, American Airlines (AAL) on October 22, and JetBlue Airways (JBLU) on October 27. Forward guidance on fuel strategy and capacity management from these carriers will determine whether airline stocks can offset rising operating costs.
Key points
- Delta Air Lines reduced its 2026 adjusted earnings forecast by nearly 25% due to a $6 billion increase in annual fuel costs.
- Delta Q3 adjusted fuel expenses jumped 62% year over year to $4.14 billion, dragging earnings to $1.72 per share.
- The U.S. Global Jets ETF has declined 3% year-to-date as rising operating expenses pressure airline margins.
- Major U.S. carriers including United Airlines, Southwest Airlines, and American Airlines report Q3 earnings later in October.
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Why did Delta Air Lines cut its 2026 earnings forecast?
Delta reduced its outlook by nearly 25% because surging jet fuel prices, linked to conflict in Iran, are expected to add $6 billion to its annual fuel bill compared with 2025.
How are rising fuel costs affecting the U.S. Global Jets ETF?
Surging fuel expenses are squeezing profit margins for major airlines, creating performance headwinds for the U.S. Global Jets ETF (JETS), which holds exposure to the sector.
When do other major U.S. airlines report third-quarter earnings?
United Airlines and Alaska Air Group report on Oct. 20, Southwest Airlines on Oct. 21, American Airlines on Oct. 22, and JetBlue Airways on Oct. 27.