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

Delta Air Lines and United Airlines both absorbed sharply higher jet fuel costs this quarter, but Delta's earnings and margins held up better than United's. Delta's Monroe Energy refinery and hedging gains provided more structural fuel-cost protection than United's liquidity-based approach of raising cash reserves. Both airlines successfully raised ticket prices to offset fuel inflation, with Delta achieving comparable unit-revenue growth while expanding capacity far less than United.

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. 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 United As 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 Approach At 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 derivative contracts extending a year or more out, U.S. legacy carriers have largely stopped using the strategy. Delta Air Lines Today DAL Delta Air Lines $84.15 -2.55 (-2.94%) As of 07/17/2026 03:59 PM Eastern This is a fair market value price provided by Massive. Learn more. 52-Week Range $50.44 ▼ $95.68 Dividend Yield 1.02% P/E Ratio 13.96 Price Target $100.40 Add to Watchlist Industry reporting has pegged the impact of that exposure, and it explains the problem well. A 1-cent move in jet fuel can cost a major U.S. carrier roughly $50 million a year, with no derivative book absorbing the blow. Delta is the partial exception because it owns Monroe Energy, a Trainer, Pennsylvania refinery that supplies a meaningful share of its jet fuel needs. Third-party refinery sales hit $2.09 billion this quarter, up 83% year-over-year, and Delta credits the refinery with an 11-cents-per-gallon benefit this quarter (including a 5-cent hit from a temporary outage). Delta's earnings report showed $301 million in mark-to-market hedge adjustments and settlements this quarter alone. That's not the 80%+ coverage ratios you see at Ryanair or Air France-KLM, but it's meaningfully more structural protection than a pure spot-market buyer.