Delta Air Lines Inc. shares climbed more than 11% in early session on Wednesday amid a broad rally for travel equities, even as the company issued a lower-than-anticipated profit forecast for the second quarter.
The Atlanta-based carrier anticipates more than $2 billion in additional fuel expenditures through June due to the ongoing Iran conflict, leading management to adopt a cautious stance and maintain its existing full year earnings target.
“We’re not updating it in light of the uncertainty, so I think it’d be imprudent to make any estimate at this point,” Chief Executive Officer Ed Bastian said.
have surged as the Middle East crisis disrupts energy markets, inflating operational costs for carriers despite resilient traveler demand.
This financial pressure is forcing airlines to evaluate how much of these expenses can be mitigated through ticket price hikes without damaging future booking volumes.
Bastian said that Delta is exploring further fare adjustments beyond those already implemented.
Airline Shares
Global airline stocks rallied on Wednesday following President Donald Trump’s announcement of a fourteen-day ceasefire in exchange for Tehran reopening the Strait of Hormuz, a critical corridor for oil and commodity exports.
At 12:58 p.m. EDT, Delta Air Lines stock was trading higher by $3.96, or 6.03%, at $69.58.
Stocks of rival American Airlines Group Inc. rose more than 8% and United Airlines Holdings Inc. gained more than 10%.
Last quarter, the airline projected its full year 2026 earnings to land between $6.50 and $7.50 per share.
“I’m not walking it back,” Bastian said of the forecast. “But as we gain more knowledge of the impact of the duration of the fuel spike over the course of the next couple of months, we’ll be in a better position to update it.”
The company reported adjusted quarterly earnings of 64 cents per share, outperforming the 57 cents estimated by analysts.
The company’s adjusted operating revenue reached $14.2 billion, exceeding Wall Street projections of $14.08 billion.
‘Capacity Reductions’
The carrier will implement “meaningful capacity reductions” of approximately 3.5% relative to its initial quarterly plans.
“We’re obviously going to be looking to save our capex and cash flow if this is going to be with us for an extended period of time this year,” Bastian said.
Last month, the firm reported robust booking activity as customers secured lower rates before oil prices eclipsed $100 per barrel.
Bastian previously highlighted a $400 million surge in fuel costs during the first half of March alone.
The company expects a pre-tax profit of roughly $1 billion for the June quarter, alongside revenue growth in the “low teens” percentage range.