Rising crude oil prices amid the Iran conflict are driving a sharp increase in airline fuel costs, with analysts revising up 2026 expectations across the sector.

US carriers are seeing particularly large adjustments. Delta Air Lines Inc.’s (NYSE: DAL) 2026 fuel expense is now projected at $11.17 billion in 2026, up 10.8% from estimates prior to the start of the conflict on February 28, 2026. American Airlines Group Inc. (NASDAQ: AAL) and United Airlines Holdings Inc. (NASDAQ: UAL) also face revised fuel bills of $12.24 billion, up +10.8% compared to pre-conflict estimates and $12.84 billion, up +10.7%, respectively.

Regional and European operators are also feeling the pressure. Alaska Air Group Inc. (NYSE: ALK) and JetBlue Airways Corp. (NASDAQ: JBLU) have seen 2026 fuel cost estimates rise by 8–9%, while Deutsche Lufthansa AG’s (ETR: LHA) fuel costs are now expected to reach $9.40 billion, 13.8% above prior projections. Air France-KLM SA’s (EPA: AF) forecasts are up modestly to $7.62 billion, up 2%.

On average, analysts have lifted full-year 2026 fuel expense expectations by 9%, reflecting both higher oil prices and ongoing uncertainty in the Middle East.

Quarterly projections highlight the impact of recent crude price volatility, with second-quarter 2026 estimates showing the largest jumps: American Airlines (+19.2%), United (+18.8%), Delta (+18.5%), and Lufthansa (+15.8%).

These rising input costs are translating directly into weaker profitability expectations. Operating margin estimates have been revised lower across most airlines, with the pressure most acute in Q2, mirroring the largest fuel cost increases.

Analysts have cut operating margin expectations for American Airlines and United Airlines by 2.25pp and 1.97pp, respectively in Q2, while Alaska Air and Lufthansa face even steeper downgrades of over 2.5pp. On a full-year basis, margin expectations are down by roughly 80–110 basis points for major US carriers, with several airlines, including JetBlue, remaining in or near loss-making territory.

The revisions highlight the ongoing challenge facing airlines. While passenger demand remains strong, rising input costs are set to weigh operating margins and could influence ticket pricing strategies in the months ahead.