Fuel cost reduction does not equate to immediate profit improvement. Bernstein: The real test for airline stocks is whether they can maintain high prices after cost reduction.

Senior aviation industry research analyst David Vernon from Bernstein stated that despite the slight drop in oil prices, the situation faced by the aviation industry remains uncertain. The full impact of the decrease in fuel costs on profitability may take several months to be reflected in financial reports. Vernon emphasized in an interview that while airline stocks may rise due to the expectation of lower oil prices, investors should focus on whether airlines can maintain the recent increase in ticket prices and additional fees once jet fuel costs return to normal levels. Vernon stated, "The development of this crisis is still as slow as an oil tanker." He pointed out that it takes time for refined products to be transported to the Asian and European markets, and only after that will concerns about oil shortages and price increases truly diminish. He explained that for airlines, the key issue is whether they can maintain pricing power even with lower costs. If they can do so, profitability might accelerate. Regarding consumer demand, Vernon denied the notion that any airline could be completely immune to economic pressures. Even Delta Air Lines, Inc., which focuses on high-end passengers, must consider the broader consumer impacts on their product range. He noted, "As oil prices rise, business travel fares increase, and it is likely that companies will exercise some control over business expenses." However, Vernon highlighted Delta Air Lines, Inc.'s unique competitive advantage, especially its Trainer refinery, which helps offset about one-third of the impact caused by the widening crack spread. The airline's diversification in maintenance and repair operations, as well as potential revenue from higher air freight rates in the cargo business, provide additional means to cope with cost pressures without passing the entire burden onto consumers. Looking ahead, Vernon stated that as the industry focuses on whether demand can maintain resilience in the face of rising prices and costs, the Transportation Security Administration's (TSA) security screening data remains a key indicator. He said, "If lower ticket prices start to appear this summer, I believe strong travel demand will return." He held a cautiously optimistic view on Delta Air Lines, Inc.'s position in the market. Previously, after the escalation of tensions between the US and Iran and the expiration of Trump's deadline, both parties reached a two-week ceasefire agreement through mediation by Pakistan. On Wednesday, the aviation sector saw a general increase in stock prices.