Delta Air cut its 2026 profit forecast after fuel costs surged by $6 billion. Shares fell 3.5% as the airline struggled with rising oil prices. Chief Financial Officer Erik Snell said, "All of it's fuel," explaining the downgrade. Now, many wonder if passengers will keep paying higher ticket prices.

Its shares fell 3.5% in premarket trading ‌after the carrier cut its 2026 profit forecast for the first time this year and lifted its projected fuel-cost increase by $2 billion as the Iran war has driven jet fuel prices sharply higher worldwide. With no end to the war in sight, carriers are confronting their worst crisis since the pandemic.

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The downgrade underscores a growing challenge for the industry: whether passengers will absorb further fare increases if fuel prices remain ​elevated. Airlines have already raised fares substantially this year, and analysts warn further increases could test travelers' willingness to keep spending.

Delta, the first major global carrier to ​report third-quarter results, said fuel expenses for the period rose 62% from a year earlier to $4.1 billion, exceeding its July forecast by more ⁠than $500 million.

"All of it's fuel," Delta Chief Financial Officer Erik Snell told reporters when asked what drove the forecast cut, citing increases in both

crude oil and refined jet fuel ​prices since the summer.

Delta now expects adjusted annual earnings of $5.10 to $5.60 a share, down from the $6.50 to $7.50 it forecast in July. The new midpoint of $5.35 is below analysts' average estimate ​of $5.46, according to LSEG. It forecast $4.5 billion in adjusted pre-tax profit for 2026.

Third-quarter adjusted earnings of $1.72 a share narrowly missed analysts' average estimate of $1.76, according to LSEG. Its adjusted operating margin fell to 9.4% from 11.1%.

HIGHER FARES

US airlines spent $42.9 billion on fuel for scheduled flights in the first eight months of 2026, nearly $13.2 billion more than a year earlier, despite using ​slightly less fuel, according to the Bureau of Transportation Statistics.

Strong demand and limited growth in seats have helped carriers pass higher fuel costs on to passengers. US airline fares rose an average of ‌about 25% from ⁠a year earlier in the five months through August, according to the Bureau of Labor Statistics' consumer price index.

With fuel prices remaining elevated and planned industry capacity growth set to accelerate in the fourth quarter from the third, analysts are watching whether carriers, including Delta, can raise fares further without discouraging travel.

Deutsche Bank analysts expect the industry to recover a smaller share of higher fuel costs through revenue measures in the fourth quarter, with full recovery not expected until early 2027.

Delta said demand remains strong. With almost 60% of the ​fourth quarter already booked, it expects revenue ​growth of about 20% from a year ⁠ago, Snell said.

It forecast fourth-quarter adjusted earnings of $1.15 to $1.65 a share, with the $1.40 midpoint roughly in line with analysts' average estimate of $1.39, according to LSEG.

REFINERY ADVANTAGE

Delta has an advantage over other major US airlines: its ownership of a refinery outside Philadelphia that Snell expects to generate $700 ​million in profit this year.

"We have a refinery that gives us an offset, a partial offset to fuel prices that no ​one else does," he said.

Bought ⁠in 2012, the Monroe refinery processes crude oil into jet fuel and other products. Delta still pays market prices for fuel transferred to its airline operations, but retains the refining profit within the company.

That helps when the gap between crude and refined fuel prices widens, increasing costs for airlines buying from outside suppliers. The protection varies with refining margins, however, and the refinery ⁠can lose money ​when those margins weaken.

But the refinery can only partly cushion the impact of higher fuel prices. Even ​with a projected refinery benefit of 40 cents a gallon, Delta expects its fuel cost to rise to $4.25 a gallon in the fourth quarter from $3.61 in the third.

Snell said fuel costs were expected to stay elevated for ​some time.

"Ultimately, fuel will come down. When that is, we're not exactly sure," he said.

Reporting by Rajesh Kumar Singh and Shivansh Tiwary; Editing by Jamie Freed, Christian Plumb and Pooja Desai