American Airlines further cut its 2026 earnings outlook Thursday, citing higher fuel costs, a sign that a jump in fares isn’t enough for the U.S. airline that flies the most to fully offset this year’s spike in fuel prices.
Its shares were off roughly 8% in early trading Thursday. The carrier’s executive team has been working to convince investors that the airline could improve its multibillion-dollar profit gap with rivals.
American said it could post an adjusted loss per share of as much as 65 cents up to earnings per share of 65 cents this year, below the range it estimated in April between a loss of 40 cents per share up to earnings of $1.10 a share, which was already reduced from the start of the year when it forecast $1.70 and $2.70 a share.
On a call after reporting results, American executives defended their decision to continue expanding flying, which would be up much as 5% in the current quarter.
Fuel prices have been volatile even in the few short weeks of the U.S. airline earnings season that kicked off in July, which has clouded the outlook for airlines this year. Carriers say strong demand and higher fares are helping offset some of the spike. Fuel is airlines’ biggest expense after labor.
For the current quarter, American said it could report an adjusted loss of between 70 cents a share and 10 cents a share, below the 28 cents a share in earnings Wall Street expected, but it forecast revenue to rise between 16% to 19%, above the the 16.6% analysts project.
American CEO Robert Isom told CNBC in an interview last month that the carrier’s “long-range” plan is to close the margin gap that has widened with profit leaders Delta Air Lines and United Airlines but he didn’t give a timeframe for that goal. American is planning to order new wide-body aircraft this year and will add more high-yielding premium seats to older jets, Isom said.
“While there’s still work ahead, the progress we’re making is real,” Isom said in a staff note on Thursday.
Here is what American reported in the second quarter compared with Wall Street estimates compiled by LSEG:
Earnings per share: 15 cents adjusted vs. 3 cents expectedRevenue: $16.74 billion vs. $16.71 billion expected
American’s profit in the three months ended June 30 fell 88% from a year earlier, to $71 million, or 11 cents a share, down from $599 million, or 91 cents a share, a year earlier. Revenue rose 16.3% to $16.74 billion. Passenger revenue per available seat mile, a measure of airlines’ pricing power, rose 10% from last year.
Adjusting for one-time items, American posted earnings of 15 cents a share.
