Fuel Spike Widens the Gap Between Delta and American

Crude above $108 puts renewed pressure on carriers that built 2026 plans around cheaper fuel. American Airlines guided to roughly $4 a gallon for jet fuel, with Delta and United modeling closer to $4.30 for the second quarter. Prices well above those assumptions compress margins directly, since fuel represents roughly 25% to 30% of operating expense for most carriers according to the International Air Transport Association.

The two airlines have responded very differently this year. Delta is up about 16% year to date near $80.86, supported by its refinery operation and credit card partnership revenue, both of which reduce dependence on ticket sales and dampen fuel pass-through. American is down roughly 12% at $13.49, with $34.7 billion in total debt and negative shareholders' equity of $4.1 billion, leaving thinner cushion when fuel costs absorb cash flow.

That balance-sheet difference is the reason the same commodity move produces different equity outcomes. Delta also drew a UBS price target cut to $99 from $112 last week, with the Buy rating maintained, a reminder that relative strength is not immunity. Jet fuel tracks the crude complex closely, so the Hormuz disruption and the Saudi pipeline closure will read through to carrier costs before they read through to fares.