The Surprising Reason Airline Stocks Are Soaring
The Motley Fool
Last updated: June 5, 2026
Despite soaring oil and jet fuel prices due to the war in Iran, major airline stocks like United, Delta, and Southwest have shown remarkable performance over the past month, with Delta even outperforming the S&P 500. This resilience is surprising given the significant increase in fuel costs and the subsequent lowering of earnings expectations by Wall Street analysts.
- Airline stocks have experienced a broad-based recovery, with Delta, United, and Southwest all seeing gains. This performance occurs despite jet fuel prices nearly doubling due to disruptions in oil supply and the Strait of Hormuz, leading to soaring jet fuel crack spreads. Airline CEOs have acknowledged the unprecedented spike in fuel costs and the uncertainty it creates.
- Despite these challenges, all three airlines have successfully increased fares to offset higher fuel expenses, driven by persistently strong consumer demand. This strong demand allows them to pass on costs, with airline executives expressing optimism about maintaining pricing power.
- Looking ahead, Delta and United are positioned to benefit from capacity constraints by effectively implementing price increases. Their diversified revenue streams also provide insulation from industry cyclicality, making Delta a particularly strong buy for the upcoming year.
