Delta Air Lines earnings guidance for 2026 was trimmed on Friday as the carrier contends with persistently high fuel costs, though Chief Executive Ed Bastian said rising fares have not deterred customers.
The company projected full-year adjusted earnings per share of $5.10 to $5.60, down from its July outlook of $6.50 to $7.50 when fuel prices were lower. Delta also issued fourth-quarter guidance that came in below analyst expectations, according to consensus estimates.
Delta reduced its free cash flow forecast for the year to $2.5 billion, compared with as much as $4 billion projected in July. Bastian said fares have continued to climb as the airline passes through much of an approximately $6 billion jump in fuel costs this year, and bookings remain solid. In the U.S. Gulf of Mexico region, jet fuel prices have nearly doubled to $4.34 on Thursday from $2.19 a year earlier, according to FactSet.
“The consumer response continues to be quite strong. We’re seeing it across all channels, all cabins of service, all geographies, business, leisure,” Bastian said in an interview.
Delta Air Lines earnings and Q4 revenue outlook
Delta projected a 20% increase in fourth-quarter revenue from a year earlier, up from a 16% rise in the third quarter when adjusted to account for the company’s Trainer, Pennsylvania, refinery, which processes crude oil into jet fuel and other products and provides a cost advantage over rivals. “Obviously the fuel pricing, the volatility of fuel prices have something to do with that,” Bastian said.
Delta, the most profitable U.S. airline and the first major carrier to post third-quarter results covering the peak summer travel period, reported that higher costs continued to pressure margins. The surge in fuel prices since the Iran war began in February has weighed on airline profits even as carriers exercise pricing power. The latest September inflation reading showed airfares up more than 23% year over year.
For the third quarter, Delta reported the following compared with Wall Street expectations based on LSEG consensus:
- Earnings per share: $1.72 adjusted versus $1.75 expected
- Adjusted revenue: $17.59 billion versus $17.67 billion expected
It marked the carrier’s first miss in two years. Net income was $756 million, or $1.15 per share, down 47% from $1.42 billion, or $2.17 per share, a year earlier. On an adjusted basis excluding one-time items, earnings were $1.72 per share.
Excluding contributions from the refinery, maintenance business and profit-sharing, revenue rose 16% from a year ago to $17.59 billion. Operating revenue climbed 21% in the quarter to $20.19 billion.
Premium cabin revenue increased 18% to $6.82 billion, continuing to represent a larger share of overall sales, while main cabin revenue rose 12% to $6.8 billion.
Inflight connectivity decisions and industry context
Delta, which unveiled free Wi-Fi across its fleet nearly four years ago, recently said it will add Amazon’s Leo satellite internet to its aircraft as airlines compete to deliver faster, more reliable onboard connectivity.
SpaceX CEO Elon Musk criticized Bastian on X last week after a travel blog reported Bastian told employees at an internal event, “We do not want to be with Elon Musk. Trust me.” SpaceX’s Starlink has become a leading inflight Wi-Fi provider with partnerships that include United Airlines, American Airlines, Southwest Airlines and Alaska Airlines, among others globally.
Bastian played down any personal dispute on Friday, saying in a broadcast interview that “everyone’s entitled to their opinion” and adding there is “no tit-for-tat.” He said Delta held talks with SpaceX six years ago, but the company “wasn’t ready to scale” at the time.
Editor’s note: The company later clarified adjusted earnings per share of $1.76 in one reference. An earlier version misstated the EPS in one instance.