Delta Air Lines (DAL) and American Airlines (AAL) both lifted their first-quarter revenue forecasts, reflecting that strong travel demand is more than offsetting the hit from higher jet fuel costs tied to the ongoing Iran conflict. Following the news, DAL stock jumped more than 4%, while AAL was up over 3% on Tuesday.
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Both airlines witnessed strong demand across leisure, business, and premium travel, with booking momentum picking up even further heading into March.
Delta Boosts Outlook on Strong Bookings
Delta raised its Q1 revenue outlook to 7%-9% year-over-year growth, up from its earlier 5%-7% forecast. The airline now expects $15 billion to $15.3 billion in revenue for the quarter, citing strength across its main cabin, premium, loyalty programs, and maintenance segment.
Management noted mid-single-digit year-over-year growth in domestic and international unit revenues.
CEO Ed Bastian told CNBC that travel demand has been so strong that the airline has absorbed a roughly $400 million fuel cost hit in the first quarter. Importantly, bookings are up 25% year-over-year despite geopolitical uncertainty.
American Airlines Lifts Revenue Forecast
American Airlines also raised its Q1 revenue guidance, now expecting more than 10% year‑over‑year growth, up from its prior 7%-10% range. The company said this would mark the highest quarterly revenue growth in its history.
Like Delta, American is facing a similar $400 million increase in fuel costs, but strong demand is helping cushion the impact. The company anticipates an adjusted loss per share at the lower end of its prior guidance of $0.10 to $0.50.
Meanwhile, the airline expects non-fuel unit costs to rise 4% to 5% due to lower-than-planned capacity and general cost pressures.
Which Stock Is a Better Buy, DAL or AAL?
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