Should You Dump Airline Stocks With the Iran War Still Simmering?

Key Points The U.S.-Iran war has raged for six months now, appearing to either worsen or, at best, turn into a stalemate. That may sound like bad news for airline stocks, but soaring jet fuel prices have become a manageable issue. Plus, for Delta Air Lines and United Airlines, the "premiumization" trend is helping to keep demand high. 10 stocks we like better than Delta Air Lines › The Iran war has been going on for six months, with seemingly no end in sight. In the best-case scenario, the situation turns into a stalemate. Worst case, tensions and conflict escalate. Either way, it's not looking good for the Strait of Hormuz fully opening to shipping traffic. With this, crude oil prices appear primed to remain elevated, which means jet fuel prices will remain high. Is this a sign to get out of airline stocks ? Not necessarily. In large part, an industry trend has indirectly helped to lessen the impact of this major headwind. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Image source: Getty Images. Rising jet fuel prices lead to differing outcomes for the airlines When the conflict started, shares in major and low-cost airlines alike experienced a sharp pullback. That's unsurprising, as soaring jet fuel prices typically reduce airlines' profitability, even when they raise ticket prices in response. Worse yet, the conflict served as the final nail in the coffin for one particular low-cost airline. On May 2, already-bankrupt Spirit Airlines completely suspended operations. Yet while some airlines have struggled with this headwind, for many other carriers, both low-cost and legacy, it's become a manageable issue. Premiumization proves key to legacy carrier resilience For low-cost carrier Allegiant (NASDAQ: ALGT) , strategies like reducing off-peak flying, in tandem with higher ticket prices, have helped mitigate rising fuel costs. However, even after bouncing back during the summer, shares in this particular low-cost carrier have coughed back these gains. In contrast, shares of United Airlines Holdings (NASDAQ: UAL) and Delta Air Lines (NYSE: DAL) have bounced back, with Delta trading above pre-war price levels. Why? These carriers have both raised prices to offset high fuel costs and have leaned into "premiumization," or a greater focus on affluent travelers, resulting in increased demand for premium tickets, making up for weakening demand from economy-tier passengers. While the ongoing conflict could mean further uncertainty for low-cost carriers and for legacy carriers benefiting less from premiumization, like American Airlines , barring major changes to their respective financial performances, I wouldn't view the Iran war as a reason to sell United or Delta shares. Should you buy stock in Delta Air Lines right now? Before you buy stock in Delta Air Lines, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Delta Air Lines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $430,571 !* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,399,268 !* Now, it’s worth noting Stock Advisor’s total average return is 986 % — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 28, 2026. Thomas Niel has no position in any of the stocks mentioned. The Motley Fool recommends Allegiant Travel and Delta Air Lines. The Motley Fool has a disclosure policy .

The U.S.-Iran war has raged for six months now, appearing to either worsen or, at best, turn into a stalemate.

That may sound like bad news for airline stocks, but soaring jet fuel prices have become a manageable issue.

Plus, for Delta Air Lines and United Airlines, the "premiumization" trend is helping to keep demand high.

The Iran war has been going on for six months, with seemingly no end in sight. In the best-case scenario, the situation turns into a stalemate. Worst case, tensions and conflict escalate. Either way, it's not looking good for the Strait of Hormuz fully opening to shipping traffic.

With this, crude oil prices appear primed to remain elevated, which means jet fuel prices will remain high. Is this a sign to get out of airline stocks ? Not necessarily. In large part, an industry trend has indirectly helped to lessen the impact of this major headwind.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

When the conflict started, shares in major and low-cost airlines alike experienced a sharp pullback. That's unsurprising, as soaring jet fuel prices typically reduce airlines' profitability, even when they raise ticket prices in response. Worse yet, the conflict served as the final nail in the coffin for one particular low-cost airline.