NEW YORK: US airlines reported stronger-than-expected spring travel demand, supporting higher fares and revenue growth even as a surge in jet fuel prices linked to the Iran war push operating costs higher.
Executives said carriers were already using fare increases and capacity discipline to recover part of the added expense if elevated fuel prices persist.
Airline stocks rose, with Delta Air Lines up about 7%, while United Airlines, American Airlines, Southwest Airlines and Alaska Air gained between 3% and 4%.
Delta said consumer and corporate demand accelerated into March, prompting it to raise its first quarter (1Q) revenue forecast while maintaining its earnings outlook.
The Atlanta-based carrier said sales over the past week rose about 25% from a year earlier, reflecting broad-based strength across corporate travel, international routes, premium leisure and domestic main-cabin bookings.
“The story for us in this quarter is about revenue demand and the health of the demand set,” Delta chief executive officer (CEO) Ed Bastian said at a JPMorgan industrial conference.
Delta expects 1Q revenue to grow at a high-single-digit percentage, compared with its earlier forecast of 5% to 7%.
American Airlines said its 1Q revenue is now expected to rise more than 10%, above its previous forecast of 7% to 10%, as demand outperformed expectations.
The carrier now expects an adjusted loss per share at the low end of its prior 10-cent to 50-cent forecast range.
American CEO Robert Isom said revenue performance was improving faster than expected, with momentum extending into April and May.
He said higher fuel prices added about US$400mil to the airline’s 1Q fuel bill since its last update seven weeks ago.
United said the first 10 weeks of 2026 were its strongest booking weeks ever.
Southwest said demand strength was broad-based across business and leisure travel, with March on track to be its biggest corporate travel month on record.
It maintained its outlook for significant margin expansion and earnings growth in 2026.
JetBlue said demand had strengthened across peak and off-peak periods and across premium and core cabins. Chief executive Joanna Geraghty said a stable macro backdrop was still needed for sustained earnings in 2026.
Frontier Airlines, meanwhile, slightly narrowed its quarterly loss forecast, saying solid demand had helped offset higher fuel expenses.
Jet fuel prices have jumped more than 50% since US and Israeli strikes on Iran in late February, lifting costs for an industry where fuel is second only to labour and typically accounts for about 20% to 25% of total operating costs.
US airlines are particularly exposed because most do not hedge fuel costs, unlike some European and Asian carriers that use hedging to cushion price shocks.
Bastian said jet fuel prices have “almost doubled since the start of the year,” citing a US$400mil increase in fuel costs in March alone.
He said the industry already had pushed through two fare increases in the past two weeks and that Delta remained well positioned to recover higher costs, with flexibility to cut capacity if fuel prices stay elevated.
United said it was trying to make up for an estimated US$4.6bil jump in fuel costs this year through stronger revenue, but had also already cut some flying for May and June and was looking at more reductions.
Chief executive Scott Kirby said the cuts were aimed at weaker flights, such as some midweek, Saturday and overnight services, and said the airline would rather leave some demand unmet than keep flying routes that lose money if fuel stays high. — Reuters
