Delta Air Lines is implementing a "meaningful" reduction in capacity during the current quarter to cope with elevated fuel prices driven by geopolitical tensions, according to CEO Ed Bastian during the company's first-quarter 2026 earnings call. The airline anticipates that these adjustments, which amount to approximately 3.5 percentage points from its original plan, will help offset the increased costs associated with jet fuel.
The spike in fuel prices has been attributed to the ongoing conflict in the Middle East, which has caused jet fuel prices to double from USD 2.30 per gallon at the end of 2025 to around USD 4.80 today. Despite a slight easing after a ceasefire was declared on April 8, prices are expected to remain higher for an extended period, with industry analysts forecasting that they will stay "higher for longer" than previously predicted.
Fuel Management and Financial Outlook
Delta does not hedge fuel costs, unlike many European carriers, but owns a refinery in Pennsylvania that is expected to generate a net profit of USD 300 million in the second quarter, up from USD 60 million in the first quarter. The airline warned that rising fuel costs could add more than USD 2 billion to its second-quarter expenses and expects low-teens revenue growth for the June quarter, with a projected operating margin of 6% to 8% and a pre-tax profit of about USD 1 billion.
"We woke up this morning with a very different set of fuel assumptions than we had when we went to bed," said Joe Esposito, Delta's chief commercial officer, reflecting on the volatile fuel environment.
In response, Delta has introduced measures such as higher checked baggage fees on new bookings, which could become permanent given the sustained high fuel prices. The airline also reported a net loss of USD 289 million for the first quarter of 2026.
