US airline stocks were rallying on Thursday after Delta Air Lines (DAL) issued quarterly earnings that topped estimates and reinstated its forecast, boosting hopes for the beaten-down sector that had borne the brunt of falling consumer sentiment amid tariff-related uncertainty.
Shares of American Airlines (AAL) and United Airlines (UAL) were both up more than 11% in midmorning trade following Delta’s announcement. Southwest Airlines (LUV) stock rose 5% and Alaska Air (ALK) stock rose more than 8%.
In the past few months, most US airlines have pulled their 2025 financial forecasts in the wake of widespread consumer uncertainty about how President Trump’s tariff policies might ripple out. This pushed down bookings, a key metric in the airline business.
In its premarket report on Thursday, Delta managed to notch a turnaround on that story, announcing that bookings had stabilized. In addition, it said premium ticket revenue was up 5% year over year and loyalty program revenue was up 8% year over year, even as standard main cabin fare revenue slid.
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“As we look to the second half of our centennial year, we remain focused on executing our strategic priorities and managing the levers within our control to deliver strong earnings and cash flow,” Delta CEO Ed Bastian said.
The company posted adjusted revenue of $15.5 billion and adjusted earnings per share (EPS) of $2.10. The Street was looking for revenue of $15.54 billion and adjusted EPS of $2.07, respectively, according to data from Bloomberg. Operating income came in at $2 billion, with an operating margin of 13.2%, down from 14.7% a year ago.
United, American, Southwest, and Alaska Airlines are all set to report their earnings over the next two weeks. Analysts will be watching to see whether the airlines can match Delta’s upswing in performance and whether the other carriers choose to restore their full-year forecasts.
Major airlines are also set to receive a boost from the falling price of oil over the past few months, which lowers a major expense line for airlines. Delta reported its fuel expenses were down 11% year over year in its second quarter, with the carrier’s per-gallon price for fuel down 14% year over year.
Deutsche Bank analysts see United and American, alongside niche carriers Sun Country Airlines (SNCY), up more than 3% premarket, and SkyWest (SKYW), up more than 2%, poised to deliver earnings above current Street forecasts.
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