Delta vs. United: Which Airline Is Better Built for Higher Fuel Costs?

Summary

Airline stocks’ sensitivity to jet fuel prices is tested whenever fuel spikes. In 2026, fuel costs are testing every airline's balance sheet. This quarter, both Delta Air Lines NYSE: DAL and United Airlines NYSE: UAL passed the test on paper. But they passed it in very different ways—and the difference matters more than the headline numbers. Delta's adjusted fuel price rose to $3.93 a gallon, up 75% year over year. United's was worse: $4.19 a gallon, up nearly 80%. Neither number is small. United took a significant year-over-year hit to adjusted earnings per share (EPS) and now expects almost $6 billion in incremental fuel expense for full-year 2026, up from its original budget.Get Delta Air Lines alerts:Sign Up That's real data that investors shouldn’t dismiss as quarterly noise. The question becomes which airline has the structural tools to keep passing that cost through to ticket prices without losing the traveler? How Higher Jet Fuel Costs Are Impacting Delta and UnitedAs noted above, United's adjusted EPS fell 48.6% year-over-year, from $3.87 to $1.99. Delta's adjusted EPS fell 26%, from $2.12 to $1.56. The same pattern was evident in margin compression. United's adjusted pre-tax margin fell just over six points, from 11% to 4.8%. Delta fell four points, from 11.7% to 7.7%. Delta's earnings base shrank by a smaller proportion, even though both carriers faced comparable fuel inflation. To be fair, not all of the weakness in United’s EPS and margin numbers was due to fuel costs. The company absorbed $184 million in one-time labor contract charges this quarter, versus $561 million a year ago. Delta's Fuel Hedging Strategy Vs. United's Liquidity ApproachAt the crux of the "built for higher fuel costs" question is the strategy of fuel hedging. Most U.S. major airlines walked away from large-scale fuel hedging years ago. Unlike European carriers such as Air France-KLM OTCMKTS: AFLYY or Ryanair NASDAQ: RYAAY, which routinely lock in 70%–90% of fuel needs through deriv...