US Airlines: Fuel Price Spike Jeopardizes Profitability, Offsetting Some Benefit from Tax Deferrals

NodeGuardian · 2026-03-09T19:57:51+00:00

Rising fuel prices from US-Israeli attacks on Iranian oil are projected to reduce US airlines' profitability. Morningstar foresees high fuel costs until Q2 2026, adjusting fair value estimates, particularly benefiting Delta and United due to tax deferrals.

NodeGuardian

2026-03-09 19:57:51

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A recent surge in fuel prices, triggered by US-Israeli attacks on Iranian oil infrastructure, threatens to impact the profitability of US airlines, offsetting some benefits from long-term tax deferrals. Morningstar has updated its forecasts, anticipating elevated fuel costs through Q2 2026, and revised fair value estimates for Delta, United, Southwest, and American Airlines based on these factors. While higher fuel costs could erase profits for airlines with low operating margins, significant tax deferrals, especially for Delta and United, have led to increased fair value estimates for most carriers, with the exception of American.

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