American Airlines cuts 2026 outlook on fuel spike

American Airlines (AAL) Group cut its 2026 outlook on Thursday, warning that higher jet fuel costs will push the company to an adjusted full-year loss of $1.00 to $1.60 per share. The new guidance replaces a July forecast range that had allowed for a profit of up to $0.65 per share. Shares fell in premarket trading as investors reacted to the deeper loss outlook and the impact of what management has described as historically high fuel prices.

The airline also projected an adjusted loss of $0.50 to $1.10 per share in the fourth quarter of 2026, underscoring that the fuel-driven margin pressure seen so far this year is expected to persist. Management indicated that elevated fuel prices will lead to slower growth in the business over the coming years.

The guidance cut came alongside American’s third-quarter results. Revenue rose 19.3% from a year earlier to about $16.3 billion, above analyst estimates and the top end of the company’s own guidance range. Premium revenue increased 22.9% year over year, while Main Cabin revenue climbed 19.5%, and managed corporate revenue grew 27.6%, marking a sixth straight quarter of double-digit growth.

Despite this demand strength, American posted a GAAP net loss of $269 million, or $0.41 per share, compared with a loss of $114 million, or $0.17 per share, a year earlier. On an adjusted basis, the carrier reported a net loss of $182 million, or $0.28 per diluted share, narrower than some analyst expectations but still reflecting the drag from higher operating costs.

Through the first nine months of 2026, American reported a net loss of $580 million, compared with net income of $12 million in the same period of 2025, as rising fuel costs overwhelmed record revenue gains.

Fuel was the main driver of the weaker outlook. In the third quarter, American’s fuel expense rose by $1.9 billion, or 67.5%, to about $4.6 billion, with the airline paying an average of $3.85 per gallon. For the fourth quarter, the company assumes an average fuel price of about $4.70 per gallon based on the forward curve as of October 19.

At that assumed price, fourth-quarter fuel expense is expected to increase by about $2.8 billion compared with the same period last year. Management said that while historically high fuel prices significantly affected financial results, the company remains focused on restoring profitability and building a stronger business over the long term.

For the fourth quarter of 2026, American expects revenue to grow between 19.5% and 22.5% year over year, with capacity projected to be up between 5.5% and 6.5%. The company expects to set another revenue growth record to close out the year, even as higher fuel costs offset much of the benefit from stronger demand and higher fares.

In response to the cost environment, American plans to slow its capacity growth next year and now expects network growth in 2027 to be slower than in 2026. Executives said they anticipate leading network carriers in the spread between year-over-year unit revenue growth and growth in unit costs excluding fuel, special items and profit sharing, reflecting efforts to manage non-fuel costs while navigating elevated fuel prices.