Delta Air Lines is set to become the first major carrier to report first-quarter earnings on Wednesday, as the industry grapples with concerns stemming from the Middle East conflict. Over the past month, airline stocks have faced pressure due to fears that a war involving Iran could keep fuel prices elevated for longer, forcing carriers to either compress margins or raise fares.
Amid this period of uncertainty for the aviation sector, major U.S. airlines are preparing to release their financial results this month. Delta Air Lines (DAL) will lead the way with its report on Wednesday, followed later in the month by Alaska Air Group (ALK), United Airlines (UAL), and Southwest Airlines (LUV).
In recent weeks, airline stocks have come under pressure as fuel prices climbed due to the Iran conflict and potential oil supply disruptions. Airlines have been forced to increase ticket prices to offset soaring fuel costs, which could also dampen travel demand, especially as many consumers are already showing signs of economic strain.
Year to date, Delta's stock has declined by approximately 4%, a smaller drop compared to many of its peers. Over the same period, Southwest shares have fallen around 9%, while United has tumbled roughly 18%. Alaska Air Group and American Airlines (AAL) have seen their shares plunge nearly 30%.
Why This Matters for Investors Many investors will be closely watching Delta's first-quarter results and forward guidance for signals about how other major airlines may perform. Commentary from company executives could also provide insight into trends for the remainder of the year.
Analysts at UBS recently noted that airline revenue for the first quarter could have upside potential, following comments from some executives touting strong early-year demand. However, the analysts also cautioned that, given uncertainty around the fuel price outlook, some carriers may pause providing full-year earnings forecasts.
Analysts from Bank of America indicated they expect smaller airlines could face difficulties if fuel prices remain high, but added that an earlier-than-expected resolution to the Iran conflict could lead to a "strong earnings recovery" for the sector.
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