Two of the biggest carriers in the world went to the JPMorgan Industrials Conference on Tuesday and delivered the same basic message: people want to fly, they are willing to pay for it, and a war-driven spike in jet fuel is not stopping them. Both Delta Air Lines and American Airlines raised their first-quarter revenue guidance on the day, lifting the entire airline sector and offering the clearest evidence yet that travel demand has decoupled from the energy volatility gripping other parts of the economy.
Delta upgraded its Q1 revenue growth forecast to high-single digits from its original 5% to 7% range, projecting total first-quarter revenue between $15 billion and $15.3 billion, well ahead of the analyst consensus of $14.67 billion. The airline said the revised outlook reflected a sharp acceleration in both consumer and corporate demand through the first half of March, with domestic and International unit revenues both growing at mid-single-digit rates year-over-year. Shares climbed as much as 6% to 7% in Tuesday trading following the announcement.
CEO Ed Bastian made the underlying numbers as concrete as possible. “We’ve seen eight of the top 10 sales days in our history this quarter, and five of those just within the last week of March,” he told CNBC. “Even with the war going on, our revenues, our bookings are up 25% year over year.” He acknowledged the $400 million hit from elevated jet fuel prices directly but said demand had absorbed it. Earnings remain within the initial guidance range, Delta added, meaning profitability has held despite the cost increase.
American Airlines matched the tone. CEO Robert Isom said at the same conference that total Q1 revenue is now expected to grow more than 10% year-over-year, up from prior guidance of approximately 7% to 10%, and described it as “the highest year-over-year quarterly revenue growth in its history.” American is assuming jet fuel at approximately $2.75 per gallon and now expects its adjusted loss per diluted share to land at the lower end of its initial $0.10 to $0.50 range, a more nuanced outcome given its fully unhedged fuel exposure.
The revenue momentum has a specific engine behind it: premiumisation. Delta’s strongest performing segments are its premium cabin, its loyalty programme and its maintenance, repair and overhaul division, the last of which is growing approximately 150% year-over-year and contributing nearly two percentage points to total revenue growth on its own. These are the parts of the Business insulated from fuel cost volatility by their pricing power and structural stickiness, and they reflect a deliberate strategic evolution by Delta over the past decade.
United Airlines, which was not cutting guidance, reaffirmed its full-year 2026 EPS target of $12 to $14, a bullish signal given the energy backdrop. JetBlue also raised its unit revenue growth forecast to 5% to 7% from a prior “flat to 4%” range. Southwest held steady, with CEO Bob Jordan telling the conference that the company’s fourth-quarter outlook “is fully on track” while acknowledging that fuel prices remain a wildcard.
The broader airline sector had been under significant pressure since the Iran conflict escalated at the end of February, with Southwest down 26%, United down 21% and American off 20% from their pre-conflict levels. Delta, which carries a stronger balance sheet than its peers, had fared relatively better but was still down roughly 14% from its year-to-date high before the Tuesday rally pushed it back through its 200-day moving average.
What the guidance revisions reveal most clearly is that airline demand, at least in the premium and corporate segments Delta and United have cultivated, is genuinely inelastic to short-term geopolitical shocks. Passengers who are booked for business travel do not cancel because oil is expensive. Leisure travellers planning summer trips do not necessarily push their plans back because fuel surcharges increase by a few dollars. The structural case for holding the major carriers is essentially intact.
Delta’s balance sheet discipline adds another layer to the investment thesis. The company ended 2025 with gross leverage at 1.9x, down from 5.0x in 2022, and is targeting approximately 1.5x by the end of 2026. It holds more than $40 billion in unencumbered assets and is generating free cash flow at a pace the rest of the industry cannot match. Its market capitalisation of approximately $39.74 billion is trading below 8.5x forward earnings, cheaper than both its historical average and the broader market.
The real test of this demand resilience comes in April, when Q1 earnings provide full transparency on what the fuel cost absorption has actually done to bottom lines across the sector.