A Delta Air Lines Airbus A320 in white, red and blue livery, landing gear down, on approach to Atlanta's Hartsfield-Jackson airport under a clear blue sky · Matthew Groh, via Wikimedia Commons · CC BY-SA 4.0

Article · 2026-10-09 · 7 min read · Airlines · Stocks

Delta lowers its 2026 outlook as it plans for $4.25 jet fuel

On Friday 9 October Delta Air Lines reported September-quarter operating revenue of $20.19 billion, 21 percent more than a year earlier, and an adjusted fuel price of $3.61 a gallon against the $3.15 it assumed in July; it now plans the December quarter on about $4.25 a gallon, with revenue about 20 percent higher and an operating margin of 7 to 9 percent, and it lowered its full-year free cash flow outlook to about $2.5 billion from $3 to $4 billion.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

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What Delta reported

On Friday 9 October, before the stock market opened, Delta Air Lines reported its results for the September quarter, the three months to Wednesday 30 September 2026, in a press release furnished to the Securities and Exchange Commission with a current report on Form 8-K. Operating revenue was $20.19 billion against $16.67 billion a year earlier, 21 percent more. Leaving out the fuel its refinery sells to other companies, the adjusted figure was $17.59 billion, 16 percent more, which the company called 'record September quarter total revenue'. ^{[1, 4]}

Profit was lower. The release reported operating income of $1.45 billion, an operating margin (the share of revenue left after operating costs) of 7.2 percent against 10.1 percent a year earlier; pre-tax income of $1.07 billion against $1.78 billion; and net income of $756 million against $1.42 billion. On the adjusted basis the operating margin was 9.4 percent and pre-tax income $1.50 billion, against $1.48 billion a year earlier. The release also gave earnings per share for the quarter, left out here. ^{[1, 4]}

In its July release Delta had said it expected September-quarter revenue to be 'Up Mid-Teens' with an operating margin of 11 to 13 percent, on 'a projected all-in fuel price for the quarter of approximately $3.15 per gallon'. The quarter's adjusted fuel price came in at $3.61 a gallon, according to the October release, 46 cents above that assumption by the desk's arithmetic. The chief financial officer, Erik Snell, said in the release that the company absorbed 'more than $500 million of higher fuel costs compared to our guidance in early July'. ^{[1, 2]}

Fuel, the cost that moved

As reported, fuel expense was $4.35 billion against $2.57 billion a year earlier, at an average of $3.80 a gallon against $2.26, the release said. The adjusted figures, which remove the refinery's sales to other companies and its hedge results, were $4.14 billion, 62 percent more than a year earlier, and $3.61 a gallon, 60 percent more, after what the company calls a refinery benefit of 13 cents a gallon. Delta owns the Trainer refinery through its subsidiary Monroe Energy, and the refinery benefit is the saving on each gallon the airline burns that the company attributes to owning it. ^[1]

The press has tied the higher fuel bill to the war with Iran. Reuters reported on Friday 10 July that carriers raised fares in the spring 'during a surge in jet fuel prices tied to the Iran war', that US spot jet fuel had climbed back to $3.18 a gallon 'amid renewed hostilities between the U.S. and Iran', and that the early-April peak was roughly $4.88 a gallon. FOX reported on Saturday 19 September that the global average jet fuel price had climbed to $181.46 a barrel in the prior week, according to the International Air Transport Association. On Friday 9 October Skift reported Snell telling reporters that jet fuel 'sat at an average of $4.50 as of Thursday evening', and the Atlanta Journal-Constitution wrote that 'the war in Iran continues to drive up fuel prices'. ^{[6, 7, 3, 4]}

What paid for it

Revenue per seat did the work. Adjusted total unit revenue, the revenue earned for each available seat mile (one seat flown one mile), grew 15 percent, the release reported, while capacity was flat: 79.29 billion available seat miles against 79.05 billion, with 86 percent of seats filled in both years. Domestic unit revenue was up 16 percent and international unit revenue up 12 percent, led by Latin America at 22 percent; transatlantic unit revenue was up 11 percent, and transpacific revenue was up 13 percent on 8 percent more capacity. ^{[1, 3]}

The release reported premium ticket revenue of $6.82 billion, 18 percent more than the $5.80 billion of a year earlier, and main cabin ticket revenue of $6.80 billion, 12 percent more. Loyalty and related revenue was $1.35 billion, up 19 percent; the company said total loyalty revenue grew 18 percent and American Express remuneration, what the card issuer pays Delta under their co-brand card deal, grew 15 percent, 'positioning the full year to exceed $9 billion'. Cargo revenue was up 29 percent and revenue from maintenance work for other airlines up 28 percent. Premium and these other streams made up 61 percent of adjusted revenue, by the company's count. ^[1]

Cash, debt and the new outlook

Free cash flow, the cash left after spending on aircraft and other investment, was $463 million in the quarter against $833 million a year earlier, the release reported, and $1.9 billion for the year to date, by the chief executive, Ed Bastian. Delta paid $1.2 billion on debt and finance leases in the quarter; total debt and finance lease obligations were $12.85 billion at the end of September against $14.88 billion a year earlier, and adjusted net debt was $13.35 billion, $950 million less than at the end of 2025. Liquidity, its cash, short-term investments and unused credit lines, was $6.9 billion. ^[1]

For the December quarter the company said it expects revenue up 'approximately 20 percent over last year' and an operating margin of 7 to 9 percent, assuming 'fuel at the forward curve as of October 2, 2026', a refinery benefit of about 40 cents a gallon and 'a projected all-in fuel price for the quarter of approximately $4.25 per gallon'; it also gave a range for earnings per share, left out here. The chief commercial officer, Joe Esposito, said seats would grow 'less than 2 percent, including a reduction in Main Cabin seats'. Skift reported Snell saying the quarter was already almost 60 percent booked. ^{[1, 3]}

For the full year, the company now expects free cash flow of approximately $2.5 billion, against $3 to $4 billion in its July release, and gross leverage, its adjusted debt measured against a year of earnings before interest, taxes, depreciation, amortization and aircraft rent, of approximately 2.2 times against approximately 2 times in July. It said it would pay down more than $2 billion of debt in 2026, and it gave a lower full-year range for earnings per share than in July. Bastian said Delta expects 'a pre-tax profit of roughly $4.5 billion, absorbing a $6 billion increase in fuel costs'; in July, Reuters reported Snell saying the fuel bill would be about $4 billion higher than in 2025. Skift's account on Friday has Snell saying Delta 'will incur $6 billion in fuel expenses this year', which reads differently from the release's increase of $6 billion. Reuters headlined its report 'Delta Air Lines cuts profit outlook as fuel costs outpace fare gains'. ^{[1, 2, 3, 5, 6]}

What settles it next

Delta's December-quarter results will show whether fuel averages near the $4.25 a gallon it assumed from the forward curve of Friday 2 October, and whether revenue grows about 20 percent with a margin of 7 to 9 percent, as the company said it expects. Before then the other large carriers report on the same fuel market: United Airlines will issue its third-quarter results and outlook after the market closes on Tuesday 20 October, with a call on Wednesday 21 October; Southwest Airlines will release its results after the market closes on Wednesday 21 October, with a call on Thursday 22 October; and American Airlines Group will webcast its third-quarter call on Thursday 22 October at 7:30 a.m. Central time, according to their announcements. ^{[1, 8, 9, 10]}

Who it reaches

Delta Air Lines (DAL) is the reporting company: its September quarter shows adjusted revenue per seat up 15 percent on flat capacity while its adjusted fuel price was 60 percent higher a gallon than a year earlier, and its outlook for the rest of the year rests on an all-in fuel price of about $4.25 a gallon, its refinery benefit included, the release said. ^[1]

United (UAL), American (AAL) and Southwest (LUV) buy jet fuel in the same market and report later in October. At Morgan Stanley's Laguna conference, FOX reported, American's finance chief Devon May said fourth-quarter jet fuel was about $1 a gallon above what the airline projected in July, adding roughly $1 billion to its fuel costs; United's finance chief Michael Leskinen said some December flights will not be flown; and Southwest's finance chief Tom Doxey said trimming capacity would be the 'natural response' if fuel is higher for longer, while a Southwest spokesperson said the schedule changes so far were minimal. ^{[7, 8, 9, 10]}

Sources

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