Delta Air Lines (DAL) Stock Rises 4% After Raising Q1 Revenue Outlook

TLDR

• Delta raised its Q1 revenue outlook to “high-single-digit” growth, up from its prior 5%–7% forecast
• Q1 earnings guidance held firm at 50–90 cents per share
• Jet fuel prices have jumped more than 50% since U.S. and Israeli strikes on Iran in late February
• DAL stock rose ~3.6% in premarket Tuesday, after a 3.5% gain Monday
• Southwest is down 26% and United down 21% since the Iran conflict began

Delta Air Lines raised its first-quarter revenue outlook on Tuesday, even as jet fuel prices continue to climb following the outbreak of conflict in the Middle East. The stock was up 3.6% in premarket trading.

The carrier now expects Q1 revenue to grow at a high-single-digit percentage. That’s an upgrade from its earlier January forecast of 5% to 7% growth.

Delta Air Lines, Inc., DAL

Delta kept its adjusted earnings per share guidance unchanged at 50 to 90 cents for the quarter. The company said consumer and corporate demand trends have improved into March.

“Demand momentum” was cited as the reason for the revenue hike. Delta said it was well-positioned to navigate the current environment and would adjust capacity if fuel prices stay elevated.

Jet fuel prices have surged more than 50% since U.S. and Israeli strikes on Iran in late February. Prices are now trading between $150 and $200 per barrel, up from around $100 before the war.

Fuel typically makes up between a fifth and a quarter of airline operating costs, making it the second-largest expense after labor. That’s why the spike has rattled the sector hard.

Airline stocks have been under pressure since the conflict began. Southwest is down 26%, United is off 21%, American has dropped 20%, and Delta itself is down 14% — even after Monday’s gains as oil prices dipped.

Southwest’s decline makes it the second-worst performer in the S&P 500 over that period, behind only Ulta Beauty.

JPMorgan Conference in Focus

All four major U.S. carriers — Delta, United, Southwest, and American — are presenting at the JPMorgan Industrials Conference in Washington on Tuesday. Some may offer updated first-quarter or even full-year guidance.

Delta filed its presentation early, ahead of the conference. That move allowed investors to digest the numbers before markets opened.

United Airlines CEO Scott Kirby said last week he expects a brief surge in fares before prices normalize, according to The Wall Street Journal. He also noted last Monday was United’s best-ever day for bookings.

German carrier Lufthansa has separately reported a sharp rise in long-haul demand since the conflict began, pointing to continued travel appetite despite the geopolitical backdrop.

Can Airlines Pass on Fuel Costs?

The central question for investors is whether carriers can offset higher fuel costs through fare increases. UBS analyst Atul Maheswari said in a Sunday note that markets will focus on airline commentary around how much of the fuel spike can realistically be passed on to passengers.

For fare hikes to stick, demand needs to hold up. So far the demand signals look reasonably solid.

There is one risk hanging over the sector. Airlines could withdraw full-year guidance, as they did in April last year following President Trump’s sweeping tariff announcement.

Delta currently holds roughly two weeks of fuel inventory, which offers a short-term buffer. Whether that’s enough depends on how long prices stay elevated.

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