Delta Air Lines Inc. reduced its full-year earnings outlook as jet fuel prices remain elevated, signaling mounting pressure on an airline industry whose smaller players are even less equipped to weather spiraling costs.
The Atlanta-based airline said Friday it expects adjusted earnings of $5.10 to $5.60 per share in 2026, well below the $6.50 to $7.50 range it reaffirmed in July. The new forecast is in line with analyst estimates compiled by Bloomberg of $5.44 per share for the year.
Delta said it expects to absorb approximately $6 billion in additional fuel costs this year compared with 2025, with the war in the Middle East showing no signs of easing.
Chief Executive Officer Ed Bastian told analysts he expects flying demand to hold up despite persistent higher ticket prices for an extended period, anchored by a strong US economy.
“The market has accepted these price points,” Bastian said, adding that, for wealthier consumers, “travel is one of their very top priorities.”
Shares in Delta fell 2.5% to $80.09 as of 10:46 a.m. New York time. Rivals United Airlines Holdings Inc. and American Airlines Group Inc. fell around 2%, respectively.
Delta, the first US carrier to report quarterly results, has been better insulated from war-related spikes in oil prices thanks to ownership of an oil refinery and a focus on premium customers. Its sharply reduced profit forecast underscores the challenges facing smaller, less profitable airlines that lack similar advantages.
“The refinery has about a $1 billion benefit to this year, so it is providing a bit of a boost for them,” Jefferies analyst Sheila Kahyaoglu told Bloomberg Television. “But higher fuel will eventually eat into consumer demand” and remain a major headwind for all carriers.
United, American and Southwest Airlines Co. are slated to report their results later this month.
Delta said adjusted fuel expenses jumped 62% to $4.1 billion year-over-year, including more than $500 million in additional costs compared with its July forecast.
The carrier reported adjusted third-quarter earnings of $1.72 per share, lower than the $1.82 average forecast among analysts surveyed by Bloomberg. Adjusted revenue rose about 16% from a year earlier to $17.6 billion, roughly in line with expectations.
“We continue to see very strong demand, and we see that being sustained in the fourth quarter and the start of next year,” Bastian said in an interview.
He also doesn’t expect travel demand to taper off even though flyers likely will be paying more for their seats.
“Air travel, even with a higher price point, is still a relative bargain in the consumer economy,” he said. “Airfares are still 10 points lower than inflation.”
Delta has increasingly leaned on higher-paying customers and its lucrative loyalty program to drive revenue. It recently expanded its network of exclusive Delta One lounges, further segmented its business-class cabins and deepened partnerships tied to its SkyMiles program.
Faster in-flight Wi-Fi is another perk airlines are offering to lure premium travelers.
Delta recently found itself in the middle of a public spat with Elon Musk after the carrier selected Amazon.com Inc.’s Leo satellite internet service instead of SpaceX’s Starlink. Bastian told Bloomberg in May that Amazon’s product offered better bandwidth at a significantly lower price than Starlink.
Musk repeatedly criticized Bastian over the choice, saying last week the Delta executive “will lose his job over this” after an account on X circulated unverified comments attributed to Bastian.
Read More: Elon Musk Warns Delta CEO ‘Will Lose His Job’ Over Starlink Snub
“I’m very confident that we’re doing just fine here on Wi-Fi, and I’m not going to take any bait there, as much I’d like to,” Bastian said when asked about the recent comments. “We couldn’t align on an agreement so we went our own separate paths.”
Competitors are embracing Starlink, with American announcing plans to expand the service to its entire mainline fleet of more than 1,000 aircraft.