Key Highlights

● Delta Air Lines erased early losses to finish about flat on Friday while the S&P 500 rose 46.18 points.

● Delta reported third-quarter adjusted earnings of $1.72 a share, below consensus estimates ranging from $1.82 to $1.92.

● Delta cut full-year adjusted earnings guidance to $5.10 to $5.60 a share from $6.50 to $7.50, citing fuel costs.

● CEO Ed Bastian said demand remains strong, supported by consumers' growing preference for experiences and travel.

Delta Air Lines (NYSE:DAL) opened the US earnings season for airlines on Friday with a set of results that, on paper, looked disappointing. The stock fell in premarket trading, down to around $79.80, and was still lower early in the session. By the close, however, it had recovered to finish about flat, a notable comeback on a day when the S&P 500 rose 46.18 points to 7,811.54.

Delta's upbeat comments on travel demand stood alongside the concerns about its fuel bill.

The numbers

Delta reported third-quarter adjusted earnings of $1.72 a share, below consensus estimates that ranged from $1.82 to $1.92 depending on the source. Revenue came in around $17.6 billion, slightly short of or broadly in line with expectations, depending on the tally used. It was the carrier's first earnings miss in two years.

The bigger headline was the outlook. Delta cut its full-year adjusted earnings guidance to $5.10 to $5.60 a share, down from a previous range of $6.50 to $7.50. For the fourth quarter, it guided to adjusted earnings of $1.15 to $1.65 a share. Fuel was the main culprit: Delta's third-quarter fuel bill reached $4.1 billion, up sharply from a year earlier, and the airline expects roughly $6 billion in added fuel costs this year.

Demand still strong, says the CEO

Chief Executive Ed Bastian struck a confident tone on the customer side. "The consumer response continues to be quite strong," he said. He added: "Demand remains strong, supported by consumers' growing preference for experiences and travel."

That message mattered because it suggested the problem is costs rather than customers. Airlines can try to pass higher fuel prices on through fares over time, but a collapse in demand is much harder to fix.

Fuel and the oil backdrop

The oil market remains elevated. Brent crude settled at $104.72 a barrel on Friday, up 44 cents, and US benchmark West Texas Intermediate settled at $91.85, up 36 cents. Hurricane Isaias has shut in a large share of Gulf of Mexico output. The average US diesel price was $6.28 a gallon, according to AAA.

There were hopes of relief. President Donald Trump said on Truth Social that he expects fuel prices to fall after a deal with Russia, writing: "Diesel Prices for Americans and, indeed, the World, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!" He also said Washington was having productive talks with Iran and that the US would not attack Iran before the November 3 midterm elections.

Analysts trim airline forecasts

Wall Street was already adjusting. UBS (NYSE:UBS) cut its 2026 and 2027 estimates and price targets for Delta, United and American, and said it expected third-quarter misses, according to market data. Morgan Stanley (NYSE:MS) cut estimates for Delta, United, Alaska Air (NYSE:ALK) and Southwest (NYSE:LUV). United and American slipped early on Friday as Delta's fuel warning rippled through the group.

Consumer data offered a mixed signal. The University of Michigan's sentiment index fell to a five-month low of 46.3, even as Delta reported resilient demand for travel.

Fuel Costs, Hurricane Disruption and Rival Airline Reports Will Test Delta's Outlook

Stocks trade Monday, Columbus Day, but bond markets are closed. September consumer prices are due Wednesday, October 14, with retail sales on Thursday, October 15. Bank earnings run October 13 to 16, and the Fed meets October 27 to 28. Other airlines report in the weeks ahead, and their fuel commentary will be compared with Delta's. Oil prices, hurricane disruption in the Gulf and any follow-through on the Russia diesel deal will be key.