Delta Cuts 2026 Profit Forecast as a $6 Billion Fuel Increase Outpaces Higher Fares

DAL on Friday cut its full-year 2026 adjusted earnings forecast to $5.10 to $5.60 a share, down from the $6.50 to $7.50 range it gave in July, as a $6 billion increase in fuel costs this year outruns higher fares. Third-quarter adjusted EPS came in at $1.72 against the $1.75 LSEG consensus, and adjusted revenue of $17.59 billion fell short of the $17.67 billion expected, the first time in two years that Delta has missed estimates. Net income fell 47% to $756 million, or $1.15 a share, from $1.42 billion a year earlier.

Fuel is the whole story. Jet fuel prices in the U.S. Gulf of Mexico region have almost doubled to $4.34 from $2.19 a year earlier, according to FactSet, after a price surge that began with the Iran war in February. Delta trimmed its free cash flow outlook for the year to $2.5 billion from as much as $4 billion expected in July, and its fourth-quarter profit guidance also came in below analyst estimates.

Demand is not the problem. Revenue grew about 16% in the third quarter, and Delta guided fourth-quarter revenue up about 20% from a year earlier. CEO Ed Bastian said fares keep rising as the airline passes along much of the fuel increase, and that travelers keep booking: "The consumer response continues to be quite strong. We're seeing it across all channels, all cabins of service, all geographies, business, leisure". The September inflation report showed airfares up more than 23% from a year earlier.

Delta is the most profitable U.S. airline and the first to report the summer quarter, so its read on fuel pass-through sets the tone for peers such as UAL and AAL. Shares were down about 1.8% at $80.64 in late-morning trading Friday, per SentiSense data. The questions to watch are whether fares can keep pace if jet fuel stays near current levels, and how much of the guided fourth-quarter revenue growth reaches the bottom line.