Airline Stocks Slide as Jet Fuel Costs Surge Amid Iran Conflict

Airline shares moved lower on Monday as carriers faced mounting pressure from rising jet fuel expenses linked to the ongoing conflict involving Iran. Among the hardest hit was JetBlue, whose stock fell sharply after the airline revised its second-quarter fuel cost projections upward.

According to a filing submitted to the U.S. Securities and Exchange Commission, JetBlue increased its expected second-quarter fuel costs to between $4.26 and $4.36 per gallon. The revised forecast is higher than the airline’s previous estimate of $4.13 to $4.28 per gallon, which was issued in April.

The increase comes as jet fuel prices have climbed significantly in recent months. Reuters reported that jet fuel averaged around $142 per barrel in May, compared with roughly $85 to $90 per barrel before the United States and Israel launched air strikes on Iran on February 28.

JetBlue shares were down more than 5.1% at $5.18 in afternoon trading, after dropping more than 9% shortly after markets opened. The weakness extended across the airline sector, with shares of Delta Air Lines declining about 1.3%, American Airlines falling roughly 1.8%, United Airlines losing around 2.3%, and Alaska Airlines slipping about 3%.

Despite the higher fuel costs, JetBlue said customer demand remained strong and steady, with positive performance reported across different cabin classes and regions. The airline also noted stronger-than-expected results on routes previously operated by Spirit Airlines, which ceased operations in May. JetBlue said it expects to recover at least 40% of the increased fuel expenses during the second quarter.

The airline suspended its full-year financial guidance in April and previously announced plans to slow hiring efforts while increasing airfare prices as it navigates rising operating costs.