Delta earnings to show toll of 85% surge in jet fuel costs

Delta Air Lines Inc. is set to provide the first detailed look at how U.S. carriers are withstanding an over 85% surge in jet fuel prices when it reports first-quarter earnings Wednesday, as war in the Middle East roils global energy markets.

"If these other guys make the same mistakes they made six years ago, and if the forecast above $175 per barrel is right, you’ll see airlines not survive," United Airlines CEO Scott Kirby said recently, comparing the current crisis to the pandemic.

The conflict has pushed oil prices above $100 a barrel and severely constrained jet fuel supplies, a specialized product with limited storage. The average price for U.S. jet fuel hit $4.64 per gallon this week, up from $2.50 the day before the war began, according to the Argus US Jet Fuel Index. Data from S&P Global Platts shows jet fuel prices have risen faster than crude oil, with some benchmarks up as much as 120% since late February.

This price shock is forcing airlines to pass costs to consumers and threatens to ground flights if the conflict persists. U.S. carriers, which unlike many European rivals do not hedge against fuel prices, are particularly exposed. JetBlue Airways Corp. this week raised checked bag fees by as much as $9 to offset what it called "rising operating costs."

Airlines on Emergency Footing

The surge in costs, which follows Iran’s blockade of the Strait of Hormuz, has put carriers worldwide into crisis mode. Jet fuel and labor are typically the two largest expenses for airlines, and the rapid price increase is hitting profitability.

U.S. Carriers: JetBlue raised its fee for a first checked bag on domestic flights to $39, or $49 during peak periods. United Airlines also recently hiked bag fees.
Asian Carriers: Korean Air has entered "emergency management mode," and Singapore Airlines has raised its fares. Asian airlines face a "double shock" of rising global prices and a regional fuel shortage, according to PwC Singapore.
European Carriers: While many, like Ryanair Plc, have a majority of their fuel hedged, they are not immune. Ryanair is paying nearly double for the 20% of its fuel that is unhedged. Germany's Deutsche Lufthansa AG is preparing crisis plans that could include grounding about 5% of its fleet.

Avia Solutions Group Chairman Gediminas Ziemelis, a billionaire jet tycoon, warned that the industry could see its first bankruptcies if the conflict and high prices last for more than a month.

The guidance from Delta this week will be a critical signal for the entire sector's financial health and its ability to manage the most severe fuel shock in years. Investors will be watching for commentary on booking demand in the face of higher fares and any adjustments to capacity plans for the rest of 2026.

This article is for informational purposes only and does not constitute investment advice.