Delta Is Ready to Weather High Fuel Prices

Happy earnings season. Delta Air Lines kicked off third-quarter earnings on Friday, reporting a net income of $756 million and a 16% jump in revenue on relatively flat capacity. So far, it is among the few airlines poised to make a profit this year even as it faces an extra $6 billion in fuel costs. 

Fuel prices have increased significantly since the carrier reported second-quarter earnings in July, and as a result, Delta lowered 2026 guidance to $5.10 to $5.60 in earnings per share, down from its original forecast of $6.50 to $7.50. As of Friday afternoon, the average price of jet fuel in the U.S. was $4.71 a gallon. Delta is expecting to spend $4.25 a gallon on fuel in the fourth quarter. 

Higher fuel prices mean higher airfares. And Delta CEO Ed Bastian was confident that the carrier can pass on more fare increases to customers. High-spend travelers have fueled much of Delta’s profits since the pandemic, with Bastian noting during a call with analysts on Friday that the top 40% of U.S. households make up Delta’s customer base and that they are $40 trillion wealthier compared to a few years ago. 

“As we see the customer response, candidly, the limited amount of resistance that we see, the fact that our product continues to be seen in a consumer basket as reasonably affordable — even at a 20% price increase — which largely we have taken this year. I think that's a very good sign for the future,” Bastian said. 

More airlines are slated to report third-quarter earnings later this month. Bastian said it would be key for the industry to find a way to sustain its revenue gains once fuel prices go down. 

“Fuel prices will recede, how much, how fast, I don't know, but they will,” he said. “And the test for us at Delta, and I think for the industry is to ensure that we sustain revenue that we have created, and I don't see any reason why we shouldn't.”