Delta, United shares zoom toward fresh records as airline sector rallies 20% in June
U.S. airline stocks are ending June with double-digit gains.
U.S. airlines' stocks are flying high as jet-fuel prices fall and Americans continue to take to the skies, with shares of United Airlines and Delta Air Lines zooming toward fresh records on Tuesday.
"Air-travel demand was strong before the Iran war and has remained strong throughout. The fighting drove up air fares but ended in time for fuel costs to fall," said David Russell, global head of market strategy at TradeStation.
Capacity is limited by the collapse of Spirit Airlines and the perennial backlogs at jet makers Boeing $(BA)$ and Airbus (FR:AIR) $(EADSY)$, which slows deliveries of new planes, Russell noted.
Profit margins are on track to widen into the summer travel season and as quarterly results hit. Russell said that "airline and travel stocks have finally put the last damage from COVID in the rearview mirror."
Much of sector's recent gains tie back to sliding oil prices (CL00) (BRN00). In early April, with the U.S. and Israel's war with Iran keeping the Strait of Hormuz effectively closed, U.S. jet-fuel prices soared to nearly $5 a gallon, from around $2.50 a gallon in late February. Prices are around $2.90 a gallon currently after the U.S. and Iran agreed to a 60-day cease-fire and to continuing negotiations. Crude-oil futures slid about 20% in June.
Jet fuel is the industry's No. 2 expense after labor, accounting for about 25% to 30% of total airline operating costs, according to the International Air Transport Association.
U.S. airlines and their global peers coped by tweaking capacity, generally cutting down on less popular and profitable flights, and charging more for checked bags and other fees.
The backdrop for airlines has improved over the past several weeks, and that's not all because oil futures are down, analysts at BofA Securities said in a recent note. Domestic capacity growth is "flattish" through September and real-time demand indicators remain firm, they said.
U.S. airline stocks have responded by rallying more than 20% in June. Delta $(DAL)$ and United $(UAL)$ shares were poised to extend further into record territory Tuesday.
The U.S. Global Jets ETF JETS, a proxy for the sector, hit a record $34.66 on Friday, and it's on track to end June with a gain of 13%.
Citing data from Airline Reporting, a data broker jointly owned by several airlines, the BofA analysts said that the average ticket price rose more than 18% year over year in May - with economy fares rising more than 20% and outpacing premium fares, which rose more than 14%, for the third consecutive month.
BofA said aggregated credit- and debit-card data indicate "momentum remains intact, with airline spending returning to double-digit growth, supported by strength in spend per transaction."
Delta Air Lines kicks off the sector's earnings season on July 10, with American and United reporting in the following week.
-Claudia Assis
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(END) Dow Jones Newswires
June 30, 2026 14:53 ET (18:53 GMT)
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