Delta Air Lines Inc. reported the first aid-free quarterly profit among big U.S. carriers since the start of the pandemic but said rising fuel costs pose a threat to staying in the black.

Earnings for the third quarter exceeded analysts’ expectations as the Atlanta-based airline overcame temporarily weaker demand amid coronavirus fears spurred by the delta variant.

Net income, excluding $1.3 billion in government aid, came to $194 million, or 30 cents a share, the airline said Wednesday. Analysts had expected 17 cents, according to the average of estimates compiled by Bloomberg. Airlines have posted profits during the pandemic that were assisted by federal funds.

Delta warned that it may see a return to red ink in the current quarter, mainly because of higher jet-fuel costs, which it forecast rising as high as an average of $2.40 a gallon, up from $1.94 in the third quarter.

“That’s going to be a limiter on our ability to post a profit in the quarter. At these current fuel levels, it looks like we’ll have a modest loss,” Chief Executive Officer Ed Bastian said in an interview. Fuel prices have risen 60% this year, he said.

Delta dropped 3.4% to $42.06 at 9:40 a.m. in New York after sliding 4%, the most intraday since Sept 10. Other airlines slumped as well. Delta had gained 8.3% this year through Tuesday, the worst performance in the S&P 500 Airlines Index.

Delta is the first major U.S. carrier to post third-quarter results, and discussion of its outlook on a conference call later Wednesday will be closely followed. United Airlines Holdings Inc., American Airlines Group Inc. and Southwest Airlines Co. are scheduled to report earnings next week.

The 11 largest U.S. carriers are expected to have a combined operating loss of $694 million and a pretax loss of $1.9 billion for the quarter, according to Deutsche Bank analyst Michael Linenberg.

Delta had racked up five consecutive quarterly losses after the pandemic hit in March 2020 and wiped out global travel demand. Third-quarter revenue, excluding refinery sales, was $8.3 billion, less than the $8.45 billion anticipated by analysts.

A drop in bookings from the delta coronavirus variant bottomed out in September, and the airline has seen improving demand, including a rebound in domestic business travel.

The carrier expects fourth-quarter revenue to rise to the low 70% range of 2019 levels, up from 66% in the third. Costs for each seat flown a mile, a measure of efficiency, excluding fuel will increase as much as 8% from the 2019 quarter.

The airline and other carriers are banking on the re-opening of U.S. borders to travel from the U.K. and continental Europe next month to revive international trips, particularly by business passengers. The vital trans-Atlantic market has remained hindered by a variety of testing and quarantine requirements among countries.

Half of Delta’s passenger revenue in 2019 was from corporate accounts, and the company has said its greatest growth potential is in international markets. Reservations for trans-Atlantic flights to the U.S. jumped 10-fold overnight after the U.S. said in September that it would lift restrictions.

Those bookings between the U.S. and U.K. remain “very strong,” Bastian said in the interview, which was before Delta released results.

“I feel very good with what we’re seeing in bookings and forward demand expectations on multiple levels.”

Delta remains the lone holdout among the largest U.S. airlines when it comes to requiring employee vaccination against Covid-19, even after peers American and Southwest said Tuesday they’d defy a Texas ban on compulsory vaccination to meet federal requirements. Delta and other carriers with federal contracts have been ordered to comply with the White House’s policy.

About 90% of Delta workers have had the shots, and that number should reach 95% by November before taking into account exemptions. Bastian said he hopes to get to 100% employee compliance without requiring the shots. The airline plans to impose a $200 monthly insurance surcharge against workers who are not vaccinated by Nov. 1.

“I’d love to continue to work collaboratively with our people, trust our people to make the right decision, trust their decision and not have to threaten them with losing their jobs,” he said.