A basket of U.S. carriers is beating the S&P 500 even as war and an oil-price spike create conditions that have historically devastated the industry. In 1990, after Iraq invaded Kuwait, airline losses ran into the billions and once-dominant Pan Am and Eastern Air Lines collapsed. This time, with the notable exception of the already bankrupt Spirit, the sector has stabilized and appears poised for gains.

Delta reports Friday, kicking off earnings season for the group. Its guidance will set the tone for investors assessing whether the current resilience reflects structural improvements — such as capacity discipline and loyalty-program revenue — or merely a temporary reprieve from demand destruction. The market's reaction will signal confidence in the industry's ability to absorb higher fuel costs without the margin compression that triggered past bankruptcies.

Analysts are watching unit revenue trends and forward bookings closely. If Delta signals pricing power holds, the rally could broaden beyond the large network carriers. However, any hint of consumer pullback or capacity overexpansion would revive memories of 1990's vicious cycle.