CHICAGO, Illinois: Delta Air Lines reaffirmed its full-year profit forecast on July 10 and issued a stronger-than-expected outlook for the third quarter, signaling confidence that strong travel demand will continue to support higher airfares even as fuel prices fluctuate.

The guidance from the first major U.S. airline to report earnings offers an early indication of travel demand beyond the summer season and whether carriers can maintain fare increases introduced during this year's spike in fuel costs.

Despite the upbeat outlook, shares of Delta and other major U.S. airlines fell as investors weighed the company's revenue forecast against renewed concerns over fuel prices.

Delta's 2026 guidance was based on last week's fuel forward curve, before the latest escalation in the U.S.-Iran conflict pushed Brent crude prices higher.

Delta shares fell about two percent in morning trading, while shares of United Airlines, American Airlines and Southwest Airlines each slipped about one percent.

Chief Financial Officer Erik Snell said Delta recovered about 60 percent of its higher fuel costs during the second quarter, a faster pace than in previous periods, and expects to recover even more in the current quarter.

"Demand continues to be strong, and there are no signs of weakness or shift in patterns in demand," Snell told reporters. "We haven't seen elasticity."

Delta reaffirmed its forecast for adjusted earnings of US$6.50 to $7.50 per share in 2026, a range first issued in January. The midpoint of $7 per share is about 17 percent above analysts' expectations of $5.97, according to LSEG.

The airline also projected third-quarter adjusted earnings of $2.00 to $2.50 per share, ahead of analysts' average estimate of $2.02. It expects mid-teens revenue growth and an operating margin of 11 percent to 13 percent.

Second-quarter results suggested that Delta's revenue growth was driven more by pricing than by capacity expansion. Revenue rose nearly 14 percent while capacity increased by only about 1 percent.

Passenger revenue per available seat mile, a key measure of pricing strength, climbed 11 percent from a year earlier. Snell said third-quarter flight volumes would be roughly flat to slightly higher than last year, indicating revenue growth would continue to be driven by fares and passenger mix.

Higher fuel costs contributed to a 26 percent decline in Delta's adjusted second-quarter earnings to $1.56 per share, although the result still exceeded analysts' expectations of $1.48 per share. Delta said its fuel bill is expected to be about $4 billion higher this year than last year.