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Delta and United face higher jet fuel costs as margins compress
United’s adjusted fuel price rose to $4.19 a gallon and it now expects nearly $6 billion in incremental fuel expense for full-year 2026.
Airline earnings this quarter highlighted how sharply jet fuel moves can hit balance sheets, with both Delta Air Lines and United Airlines reporting margin compression alongside higher adjusted fuel costs. Delta’s adjusted fuel price increased to $3.93 a gallon, up 75% year over year, while United’s rose to $4.19 a gallon, up nearly 80%. The fuel shock also showed up in profitability, with United’s adjusted EPS falling 48.6% year over year to $1.99 and Delta’s dropping 26% to $1.56. Margin declines were similarly steep, with United’s adjusted pre-tax margin sliding from 11% to 4.8% and Delta’s from 11.7% to 7.7%.
United also pointed to fuel expense outlook changes, expecting almost $6 billion in incremental fuel expense for full-year 2026, up from its original budget. Both airlines’ results reflected margin pressure beyond fuel, with United absorbing $184 million in one-time labor contract charges this quarter, compared with $561 million a year earlier.
The key difference, according to the analysis, is how each airline is positioned to absorb fuel volatility. Most U.S. major airlines largely ended large-scale fuel hedging, leaving exposure to fuel price swings, which the report says can make a 1-cent move in jet fuel cost a major U.S. carrier about $50 million per year. Delta is described as a partial exception because it owns a refinery, Monroe Energy, which it supplies with jet fuel, and the report cites refinery-related figures including $2.09 billion in third-party refinery sales this quarter and an 11-cent-per-gallon benefit attributed to the refinery.