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: 63.190
Low
77.00
Averages
83.50
High
90.00
Current: 63.190
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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- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding allows for tracking significant inflows (new units created) or outflows (old units destroyed), directly affecting the ETF's underlying holdings and overall market dynamics.
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- Strategic Collaboration Deepening: This agreement not only expands Delta's technological relationship with Amazon Web Services but also plans to integrate AWS and other Amazon technologies, including AI, to enhance the travel experience for both customers and employees.
- Positive Market Reaction: Delta's stock rose 1.8% in premarket trading to $64.30, reflecting a positive market response to the partnership and investor confidence in Delta's future growth potential.
See More
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- Partnership Agreement: Delta Airlines has partnered with Amazon Leo to provide satellite Wi-Fi service on 500 aircraft starting in 2028, marking a significant advancement in the airline's in-flight internet and streaming service competition.
- Technology Upgrade: The new service will initially be available on domestic-focused narrow-body planes like the Boeing 737 and Airbus A321, addressing passenger demands for faster speeds and greater bandwidth, thereby enhancing overall passenger experience and satisfaction.
- Commercial Opportunities: Delta plans to create commerce opportunities by updating in-flight entertainment content and offering larger movie libraries, which is expected to attract more loyal customers and generate revenue through personalized advertising.
- Satellite Network Expansion: Amazon Leo currently has about 200 satellites in orbit, aiming to build a constellation of approximately 3,200 low Earth orbit satellites to support high-speed connectivity needs for businesses and consumers, further driving digital transformation in the airline industry.
See More
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- Agreement Signed: Delta Airlines has signed an agreement with Amazon's low Earth orbit satellite project, Leo, to provide high-speed Wi-Fi on 500 aircraft starting in 2028, marking a significant advancement in the airline's in-flight internet service competition.
- Aircraft Selection: The initial rollout will focus on domestic narrow-body planes, including newly ordered Boeing 737 Max 10s and some older 737s and Airbus A321s, aimed at enhancing passenger internet experience and meeting the rising bandwidth demands.
- Growing Market Demand: Delta's Chief Marketing Officer stated that passengers increasingly demand faster speeds and more bandwidth, prompting airlines to attract loyal customers with free Wi-Fi and leverage this opportunity for personalized advertising and potential shopping.
- Technological Upgrade Opportunities: Delta plans to create unique passenger experiences by updating in-flight entertainment content and enhancing technology, which is expected to generate new business opportunities, particularly leveraging its approximately 165,000 seat-back screens.
See More
