American Airlines (AAL) lowered its full-year earnings outlook on Thursday as higher fuel costs drove second-quarter bottom-line lower year on year, adding to signs that rising fuel prices are weighing on airline profitability.
The airline now anticipates its bottom line to range from an adjusted loss of $0.65 per share to earnings of $0.65 per share for 2026, compared with its previous guidance for a loss of $0.40 to earnings of $1.10. The consensus on FactSet is for non-GAAP EPS of $0.61.
Shares of American Airlines declined 8% in Thursday trade, with the stock losing 11% so far this year.
Jet fuel's average price rose to $149.40 per barrel last week, up from $119.13 for the week ended July 3, data published by the International Air Transport Association showed. The surge came as rising tensions between the US and Iran sent crude oil prices higher.
American Airlines said its second-quarter fuel costs jumped by $2.2 billion, or 83% year over year, although it was able to offset almost 50% of the headwind through higher fares amid robust travel demand. For the ongoing quarter, American Airlines sees its fuel expense rising by $1.7 billion on an annual basis.
Earlier in the week, Alaska Air (ALK) issued a downbeat third-quarter earnings forecast and swung to a loss in the previous three-month period amid higher fuel costs. Earlier this month, United Airlines (UAL) projected about $6 billion in additional fuel expense for 2026, while Delta Air Lines (DAL) said it absorbed the highest quarterly fuel expense in its history.
American Airlines' adjusted EPS slumped to $0.15 in the June quarter from $0.95 the year before, but topped the Street's view for $0.03. Total operating revenue climbed 16% to $16.74 billion, ahead of the average analyst estimate of $16.7 billion. Passenger revenue advanced 16% while cargo climbed 30%.
"Revenue growth was strong across all entities and cabins, with premium, main cabin, domestic and international all up meaningfully year over year," Chief Executive Robert Isom said in a statement.
Total revenue per available seat mile, which is commonly used in the airline industry to measure efficiency, gained 10%. Capacity was up 5.4%.
The airline expects to record an adjusted loss of $0.10 to $0.70 in the third quarter, while the Street is looking for non-GAAP EPS of $0.26. Revenue is projected to gain 16% to 19% on capacity growth of 3% to 5%. The market's view is for sales of $16.01 billion in the quarter.
Price: $13.69, Change: $-1.10, Percent Change: -7.44%
