Analysis of Oil Price Impact on Airlines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 12 2026
0mins
Should l Buy DAL?
Source: seekingalpha
- Airline Resilience: Citi Research analyst John Godyn places Delta Air Lines (DAL) and SkyWest (SKYW) on a positive 30-day catalyst watch, indicating that these carriers are relatively insulated from the impacts of rising oil prices, although overall airline earnings are likely to be affected in the short term.
- Fuel Security for Delta: Delta Air Lines secures 75% of its fuel consumption through its Trainer Refinery in Pennsylvania, acquired for $180 million in 2012, aimed at stabilizing jet fuel costs and ensuring an uninterrupted supply for its northeastern U.S. hubs.
- Profitability Advantage: Delta boasts the highest pre-tax profit margin in the airline industry, which not only buffers its earnings per share but also generates a high-teens percentage of revenue from Atlantic routes, second only to United Airlines (UAL), showcasing its strong market position.
- SkyWest's Unique Business Model: SkyWest benefits from a regional airline contract flying model where fuel costs are nearly fully passed through to customers (approximately 90% of total capacity), and with no financing obligations on its fleet, it can effectively absorb necessary capacity reductions during economic shocks.
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Analyst Views on DAL
Wall Street analysts forecast DAL stock price to rise
18 Analyst Rating
18 Buy
0 Hold
0 Sell
Strong Buy
Current: 71.720
Low
77.00
Averages
83.50
High
90.00
Current: 71.720
Low
77.00
Averages
83.50
High
90.00
About DAL
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company has hubs and markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Santiago (Chile), Sao Paulo, Seattle, Seoul-Incheon, and Tokyo. Its segments include Airline and Refinery. Its airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and includes its loyalty program, as well as other ancillary businesses. Its refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel as well as non-jet fuel products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Strong Market Demand: Despite robust demand in the U.S. airline industry, Alaska Air faces pressure from high fuel prices; data shows March 2026 air ticket sales reached $10.4 billion, a 12% increase from March 2025, reflecting overall market recovery.
- Lack of Full-Year Guidance: The airline has refrained from providing full-year revenue or profit guidance for 2026, citing limited visibility due to fuel price volatility, which underscores the uncertainty surrounding future earnings.
See More
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- Positive Bank Performance: Bank stocks kicked off earnings season last week, with the State Street SPDR S&P Bank ETF (KBE) gaining over 2% and marking its fifth consecutive winning week, indicating strong market leadership and potentially boosting investor confidence.
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See More
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- Stanley Black & Decker Surge: Stanley Black & Decker's stock rose over 4% after the company stated that recent changes to Section 232 tariffs would not materially impact its full-year forecast, indicating strong confidence in its financial outlook.
- Fermi Stock Plunge: Shares of energy infrastructure developer Fermi fell more than 22% following the resignation of CFO Miles Everson and the recent departure of CEO Toby Neugebauer, raising concerns about the company's leadership stability and future direction.
- Biogen's Strategic Move: Biogen's stock increased nearly 3% after agreeing to pay $850 million for exclusive rights to sell felzartamab in China, which underscores its strategic expansion in the immune-related disease treatment market.
- Fertilizer Stocks Fluctuate: Fertilizer stocks experienced volatility as CF Industries rose nearly 2% due to ongoing shipping disruptions in the Strait of Hormuz, while Dow and LyondellBasell Industries also saw gains of about 4% and 2%, respectively, reflecting market reactions to supply chain challenges.
See More
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- Tech Stocks Surge: Shares of Marvell Technology and Broadcom jumped more than 7% following reports of talks with Google to develop new AI chips, although Broadcom's stock fell nearly 1.5% on the news.
- TopBuild Acquisition: TopBuild's stock surged over 17% after QXO announced its acquisition for $17 billion, which is expected to create a higher-margin business and be immediately accretive to earnings.
- AST SpaceMobile Drop: AST SpaceMobile's shares fell 15% after a satellite was launched into the wrong orbit, although the company expects to recover costs through insurance and plans to conduct monthly orbital launches starting in 2026.
See More
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- Stock Price Fluctuation: Following the merger speculation, American Airlines' stock fell nearly 3% in premarket trading, reversing gains made during Friday's market rally, indicating investor apprehension regarding the merger's implications.
- Market Share Impact: Should a merger occur, the combined entity would control approximately 40% of the domestic market share, raising significant concerns about potential monopolistic practices and likely triggering intense regulatory scrutiny.
- Industry Consolidation Outlook: While the Transportation Secretary noted there is room for mergers in the airline industry, he cautioned that any merger among major airlines would necessitate divesting certain assets to prevent adverse effects on pricing and competition in the long run.
See More
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- Dividend Growth Potential: Delta Air Lines has been recognized by Evercore ISI as one of the 10 fastest growing dividend stocks, indicating strong performance in dividend payments that is likely to attract more investor interest.
- Price Target Increase: Evercore ISI raised Delta's price target from $80 to $85 while reiterating an Outperform rating, reflecting optimistic expectations for the company's future performance.
- Sustainability Goal Adjustment: Delta removed its target of using 10% sustainable aviation fuel by 2030 from its sustainability page and rephrased its net-zero emissions goal for 2050 as an “aspiration,” indicating uncertainty in its climate objectives.
- Emission Data: Delta generated approximately 60 million tons of greenhouse gas emissions in 2024, nearly equivalent to the total emissions footprint of Ireland or Hungary, highlighting the challenges the airline industry faces in reducing emissions.
See More
