Airlines revise earnings forecasts

Major American airlines, including Delta, Southwest, American, and United, have revised their earnings forecasts downward for 2026 due to rising jet fuel prices, which are increasing operational costs and reducing profit margins.

Rising fuel costs strain profits

Jet fuel prices have surged, with Delta estimating its annual fuel bill will increase by about $6 billion compared to 2025, or $2 billion more than previously expected. This increase is not being fully offset by higher revenue from airfares, which have risen by nearly 23% on average from March to September.

Downward adjustments in earnings per share

Delta has reduced its 2026 adjusted earnings per share forecast to $5.10–$5.60, down from $6.50–$7.50 previously. Southwest has also lowered its forecast, now expecting $2.60–$2.85 in adjusted earnings per share, down from $3.25–$4.25. United Airlines is forecasting $4.80 in adjusted earnings per share for the year.

Airlines consider slowing capacity growth

To preserve margins, airlines are considering slowing the growth of their capacity, as fare increases and additional revenues are not keeping pace with rising fuel costs. Delta’s CEO, Ed Bastian, suggested the industry may need to moderate growth in 2027 to maintain profitability.

Long-term fuel cost challenges

United Airlines’ CEO, Scott Kirby, noted that high fuel costs are expected to persist into 2027. Achieving a double-digit pre-tax margin would require either lower fuel costs, slower sector growth, or a continued focus on raising fares rather than maximizing seat occupancy.