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Today's Exclusive Content Travel Demand Soars Despite Fuel Costs—Are Airline Stocks a Buy?Submitted by Jennifer Ryan Woods. Article Published: 3/21/2026. 
Key Points - Several major airlines, including Delta, American, Allegiant, and JetBlue, have raised first-quarter revenue guidance, citing stronger-than-expected travel demand even as fuel costs surge and geopolitical tensions disrupt the industry.
- Despite recent pressure on airline stocks from rising oil prices, winter travel disruptions, and weak consumer sentiment, analysts’ 12-month price targets still suggest meaningful upside for many carriers, with Delta, American, and Allegiant all expected to gain more than 20%.
- With travel demand holding up and airlines boosting outlooks, the recent pullback in airline stocks could present an opportunity for investors, though higher fuel costs and economic uncertainty may keep the sector volatile in the near term.
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Airlines have faced plenty of headwinds lately, but consumer demand doesn't appear to be one of them. On Tuesday, Delta Air Lines (NYSE: DAL), American Airlines Group (NASDAQ: AAL), Allegiant Travel Co. (NASDAQ: ALGT), and JetBlue Airways Corp. (NASDAQ: JBLU) raised their first-quarter revenue outlooks, each citing stronger-than-expected travel demand. The upbeat guidance may come as a surprise given the turbulence the industry has faced in recent months. San Francisco is the strangest city in America right now—you can hop into a self-driving car and be chauffeured by a robot, but out the window you see addicts slumped in doorways, open-air drug markets, the mentally ill screaming at the sky, and entire city blocks consumed by homeless encampments. It's ground-zero for the most disruptive technological forces of our age, and Erez lives in the Bay Area plugged into the capital, the connections, and the companies reshaping the world—the advancements in AI, blockchain, computing, and biosciences are unlike anything the world has seen before, and a tsunami of disruption is coming for everything all at once. During our most recent broadcast, we exposed what we're calling the most asymmetric opportunity of our careers: an overlooked financial company hiding a multi-billion-dollar blockchain asset Wall Street hasn't priced in—it's one of those rare situations Warren Buffett would describe as raining gold when all you have to do is step outside if you want to get rich. Watch the broadcast before the window closes now Airline stocks have been under pressure as oil prices surged amid tensions in the Middle East, driving up jet fuel costs. Carriers have also dealt with flight disruptions tied to the conflict, winter storms that caused widespread cancellations, rising airfares, and weak consumer sentiment among budget-conscious travelers. In addition, the partial government shutdown affected TSA staffing and airport operations, producing long security lines at many U.S. airports. Those challenges have weighed on airline stocks in recent weeks, with most major carriers trading lower over the past month. Despite these pressures, however, the latest guidance suggests travelers have not been deterred. Does that mean clear skies ahead for the airlines? Not necessarily. Analysts are mixed on individual carriers, but most 12-month price targets still point to solid upside, suggesting Wall Street believes strong demand could help offset rising fuel costs. Delta Sees Broad-Based Demand Strength In a presentation released ahead of a JPMorgan Industrials Conference on Tuesday, Delta raised its revenue guidance, citing broad-based momentum among domestic and international travelers across both leisure and corporate segments. The airline also noted stronger-than-expected growth in Maintenance, Repair, and Overhaul (MRO) revenue, which is running ahead of earlier projections. In an interview with CNBC, Delta Chief Executive Ed Bastian said demand has been "really, really great," noting that eight of the ten best sales days in the airline's history occurred over the past quarter. Delta now expects first-quarter revenue to rise in the high single digits, up from its earlier forecast of 5% to 7% growth. Bastian said the stronger revenue outlook is helping offset the recent surge in fuel prices, which created roughly a $400 million headwind for the airline. The higher demand is also helping make up for lost capacity caused by major winter storms. As a result, Delta continues to expect first-quarter earnings of between $0.50 and $0.90 per share. Analysts remain bullish on Delta stock, with 22 Buy ratings and just two Sell ratings. Although some price targets have been trimmed amid heightened Middle East tensions, the average 12-month target of just under $79 implies more than 20% upside from the current price of about $64.50. Shares are down roughly 4% over the past month, outperforming the airline industry, which has fallen about 18%. Over the past year, however, Delta shares have gained around 35%, compared with roughly 13% for the industry. American Airlines Signals Record Revenue Growth American Airlines offered a similar outlook, reinforcing the view that strong travel demand remains intact across the industry. In an SEC filing issued Tuesday, the airline said it now expects first-quarter total revenue to rise more than 10%, which would represent its highest-ever year-over-year quarterly revenue growth. American said it expects jet fuel to average about $2.75 per gallon in the first quarter. Because of higher fuel costs, the airline anticipates an adjusted loss per diluted share toward the lower end of its prior guidance range of $0.10 to $0.50 per share. Analysts have been more cautious on American Airlines stock, with the consensus rating at Hold. However, the average 12-month price target of around $15.50 implies more than 40% upside from the current price near $11. Shares are down around 18% over the past month and about 5% for the year, underperforming the industry over both periods. Allegiant Expects Record Quarter Despite Higher Fuel Costs Allegiant Travel also added to optimism around the sector ahead of Tuesday's JPMorgan conference, announcing in an SEC filing that it expects record first-quarter revenue despite a 5.5% decline in system capacity from the prior year. The leisure-focused carrier raised its adjusted earnings guidance to $3.25 to $3.75 per share, up from a prior range of $2.50 to $3.50 per share. It also lifted its adjusted operating margin expectations to 13.5% to 14.5%, compared with prior guidance of 12% to 15%. The stronger revenue outlook is expected to offset higher fuel costs, which the company now projects at about $3.00 per gallon, above its earlier estimate of $2.60. Given the uncertainty around fuel prices, Allegiant left its full-year outlook unchanged. Analysts are mixed on Allegiant stock, with six Buy ratings, six Hold ratings, and one Sell rating. The average 12-month price target of around $99 implies more than 25% upside from the current price. While the stock has fallen about 24% over the past month, it has gained more than 40% over the past year. JetBlue Raises Outlook, But Wall Street Remains Cautious JetBlue also raised its guidance in an SEC filing on Tuesday, citing better-than-expected demand across peak and off-peak travel periods, including strength in both premium and core cabin segments. The airline said stronger revenue trends are helping offset higher jet fuel costs, which it now expects to be between $3.01 and $3.06 per gallon during the quarter, compared with its previous forecast of $2.27 to $2.42. JetBlue raised its outlook for operating revenue per available seat mile to a range of 5% to 7%, up from prior guidance of flat to 4%. Analysts remain cautious on JetBlue, with the consensus rating at Reduce. The average 12-month price target of just under $5 still implies roughly 25% upside from the current price. Shares have fallen about 29% over the past month and are down more than 25% for the year. With travel demand holding up despite rising costs, the recent pullback in airline stocks may present opportunities. Still, investors should be selective: analysts have mixed views on individual carriers, and fuel prices and macro uncertainty are likely to keep the sector volatile. | 
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