Delta Air Lines and American Airlines raised revenue expectations for the first quarter on Tuesday, despite carriers dealing with higher jet fuel prices since the war in Iran started.
Delta CEO Ed Bastian told CNBC’s Phil LeBeau that Delta had taken a $400 million hit so far for the fourth quarter, but that demand has been “really, really great,” which was leading to higher revenue growth than the airline had originally guided for.
“The higher revenue is offsetting the cost of not just the fuel, but we’ve also had a pretty tough winter season in terms of storms,” he said. “So you put that all together, we’re expecting to come in within the original guidance of 50 to 90 cents EPS.”
Delta had previously forecast an increase in sales of as much as 7% in the first three months of 2026 and adjusted earnings of between 50 cents per share and 90 cents per share for the first quarter.
Meanwhile, American said in a securities filing that it now expects total revenue to increase by more than 10%, compared with previous expectations of 7% to 10%, due to stronger-than-expected demand.
“The revenue growth for American in the first quarter is incredibly strong, and we see that progressing as we move throughout the year,” CEO Robert Isom said at a JPMorgan conference Tuesday.
Shares of Delta and American were up roughly 5% in premarket trading.
Jet fuel is airlines’ second-biggest cost and accounts for a fifth or more of expenses, depending on the carrier. United Airlines CEO Scott Kirby told CNBC in early March that higher airfares were likely on the way as airlines cover the rising fuel costs.
Isom said Tuesday that American would also incur a roughly $400 million hit to its first-quarter expenses, in part due to the rising fuel prices.
“As we take a look at all the turbulence that’s in the industry right now, we’re making sure that we’re set to deliver, no matter what comes our way,” Isom said.
In an 8-K filed Tuesday morning, Delta said it was raising revenue guidance due to momentum in demand, citing strength across the main cabin, premium, loyalty and more. The airline also said its domestic and international unit revenues are growing in the mid-single digits year over year.
Delta added that it has its strongest balance sheet in the company’s history.
Bastian said most of Delta’s revenue comes from higher-spending customers who still want to travel, as well as from corporate customers.
“We’ve seen eight of the top 10 sales days in our history this quarter, and five of those just within the last two weeks, within just the last week of March,” he said. “Even with the war going on, our revenues, our bookings are up 25% year over year.”
Last quarter’s bookings are a softer comparison as airlines dealt with customers pulling back over tariff concerns.
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