Barron's Streetwise Airplane Stocks Sold Off. Time to Land Some Deals?
Mar 27, 2026
Tom Fitzgerald, airline analyst at TD Cowen, gives a quick take on which carriers can handle a 62% jet fuel jump and why demand still holds. He breaks down capacity discipline, Delta and United’s resilience, fuel hedging and Delta’s refinery edge. Also covers how higher fuel could reshape industry winners and which strategies boost airline profitability.
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Fuel Spike Cuts Into Airline Margins
- Jet fuel spikes (up ~62% since Feb 27) threaten airline margins because fuel is ~20–25% of revenue.
- Demand remains strong with bookings and yields rising, cushioning carriers despite higher fuel costs.
Big Two Airlines Are More Resilient
- Delta and United have shown durable outperformance because of more premium revenue, international exposure, and stronger balance sheets.
- Delta's ownership of a refinery gives it a built-in partial hedge versus peers who largely stopped hedging fuel.
Prefer Strong Operators When Buying Airline Stocks
- If investing in airlines, favor the strongest operators (Delta, United) over weaker leisure-focused carriers.
- Weaker carriers like American and JetBlue face more debt, lower efficiency, and takeover/merger speculation volatility.