While demand has been strong, rising costs – particularly with fuel – are putting pressure on profits. After all, in an industry where fuel can account for about a quarter of operating costs, even a small increase in the cost of fuel can have a substantial impact on margins. 

Delta Air Lines set the tone earlier this month, highlighting resilient travel demand. However, the company also warned that rising fuel costs are starting to weigh heavily on margins. The company expects a $2 billion surge in fuel expenses through June, including a $400 million hit in March alone. CEO Ed Bastian also struck a cautious tone on the 2026 outlook.

That same dynamic is likely to show up when American Airlines (NASDAQ: AAL), United Airlines (NASDAQ: UAL), and JetBlue Airways (NASDAQ: JBLU) over the next few days.

American Airlines Earnings Preview: Strong Demand Meets Rising Fuel Costs

American Airlines is scheduled to report first-quarter earnings on April 23.

The company recently raised its revenue outlook, now expecting growth of more than 10%, up from prior guidance of 7% to 10%, driven by stronger-than-expected demand. However, that strength is offset by costs—particularly fuel costs.

American expects a $400 million hit to first-quarter expenses due to higher jet fuel prices, tied in part to geopolitical tensions in the Middle East.

Wall Street remains cautiously optimistic. UBS recently raised its price target on AAL to $16 from $14 with a Buy rating, citing healthy demand trends and improving revenue per available seat mile. Among 23 analysts covering the stock, sentiment is mixed but leans positive.

Looking ahead, a potential easing of geopolitical tensions—and fuel prices—could act as a meaningful near-term catalyst.

United Airlines Earnings Preview: Premium Demand in Focus

United Airlines reports on April 21, and investors will be watching closely for signals on both demand and cost pressures heading into the peak summer travel season.

Analysts expect earnings per share in the range of $1.08 to $1.15 on approximately $14.3 billion in revenue. Strength in premium seating and long-haul international travel has been a key driver of recent performance.

But like its peers, United isn’t immune to rising fuel costs, which are expected to weigh on margins and potentially impact forward guidance.

Beyond the headline numbers, investors will be focused on management commentary around capacity growth, pricing power, and whether demand can remain resilient in a more uncertain macro environment.

JetBlue Earnings Preview: Turnaround Progress Takes Center Stage

JetBlue Airways will report first-quarter earnings on April 28. The company is expected to post a loss of approximately $0.72 per share on revenue of about $2.24 billion, reflecting ongoing profitability challenges.

As a result, the focus will be less on the quarter itself and more on progress in JetBlue’s turnaround strategy.

Recent analyst upgrades suggest some growing confidence. Seaport Research upgraded JBLU to Buy with an $8 price target, while Barclays raised its rating to Equal Weight and increased its target to $7 from $4. Both firms pointed to improving expectations around the company’s “Jet Forward” plan, which aims to deliver $800 million to $900 million in EBITDA by 2027.

The Bottom Line on Airline Earnings

The setup for this round of airline earnings is relatively straightforward: demand remains strong, but costs—especially fuel—are doing the damage.

That creates a challenging near-term backdrop for airline stocks. Even if revenue comes in strong, profitability and forward guidance may disappoint.

For investors, that means focusing less on headline beats and more on margins, cost trends, and management outlooks for the rest of 2026.

When Tiger Woods was at the peak of his dominance, analysts asked the same question before every major championship. Thinking about who’s going to win, are you taking Tiger or the field? Heading into 2026, investors can ask a variation of that question. That is, should you invest in Delta stock or take the field?  

A Sea of Sameness in 2025 

Airline stocks can be a challenging sector even during the best of times. However, these last five years have been particularly challenging. Demand cratered in 2020, and after operations returned to normal, it took the industry time to regain its footing. That said, demand was strong in 2025 until the government shutdown in November.  

However, as the following chart shows, investors could have picked Delta, United Airlines (NASDAQ: UAL) or Southwest Airlines (NYSE: LUV), and they would have had a nearly identical return. At any given time, one stock may have been better than the other, but buy-and-hold investors would have wound up in roughly the same place. 

But that was then. Savvy investors need to anticipate what could happen to the sector in 2026. In this case, industry dynamics favor a strong performance for Delta.  

Scarcity Works in Delta’s Favor 

Perhaps learning their lesson from prior slowdowns, airlines are managing slower demand by cutting flights rather than trying to fill their planes with teaser fares. However, that strategy plays into the hands of Delta thanks to its profitable loyalty program and focus on premium seating.  

Delta also reported high single-digit growth in business travel. And although the company isn’t known for international travel, the company’s international travel business, particularly to Europe and South America has been growing.  

Managing Expectations Is a Winning Strategy 

Speaking at the Morgan Stanley Global Consumer & Retail Conference, Delta chief executive officer (CEO), Ed Bastian, told investors that the impact of the government shutdown would result in the company missing its prior earnings guidance for the fourth quarter by about $200 million, or about 25 cents per share.  

There are at least two key takeaways for investors. First, it’s always a good sign when a company decides to get ahead of the news cycle. In this case, the only risk is if the Delta reports a larger loss in its report on January 9, 2026. Unless the market suffers from a particular black swan event in the next few weeks, that’s unlikely.  

Second, Delta also said that demand remains strong in December and into 2026. That means that the airline is putting its focus on where it should, which is in the future.  

Risks to the Thesis 

The most significant risk facing DAL stock in the short term is a second government shutdown at the end of January. As of this writing, Polymarket put the odds at 34%. That’s less encouraging than investors would like to see.  

Another concern is the broader economy. By the time we get to the first of the year, investors will be getting back to the regular cadence of economic data from the government. Jobs data continues to show a soft job market. If that trend continues, airlines would be one of the sectors to feel it the most. And even though Delta is focused on the premium consumer, it’s not without risk. 

A third risk is if the opposite happens. The economy is already “running hot” by historical GDP standards. What if it runs hotter in 2026. At some point, that will mean higher fuel prices. Delta Air Lines is relatively well protected from higher fuel prices through a combination of selective fuel hedging, ownership of the Trainer refinery, and strong pricing power. However, there would still be a limit to how much travelers are willing to pay.  

DAL Stock is the Biggest and the Best  

When investors discuss airline stocks, DAL stock is at or near the top of most lists. That sentiment was echoed by CNBC’s Jim Cramer, who recently referred to the airline as “kind of the biggest and best in the airlines.”  

The company’s dominance in the premium space of the airline industry, its focus and commitment to paying down its debt, and a favorable technical outlook suggest that if investors want exposure to the airline sector, the answer to the DAL stock or the field question is likely to be Delta.