American Airlines has significantly lowered its earnings forecast for 2026, now projecting an adjusted loss per share of up to 65 cents, compared to its previous estimate of a potential loss of 40 cents to earnings of $1.10 per share. The airline attributes this revision to higher fuel costs, which remain a critical concern as they represent the second-largest expense for airlines after labor.
Despite raising fares and experiencing strong demand, the volatility in fuel prices has created uncertainty for the airline's financial outlook. For the current quarter, American Airlines anticipates an adjusted loss of between 70 cents and 10 cents per share, falling short of Wall Street's expectation of 28 cents in earnings per share.
However, the airline does forecast revenue growth of 16% to 19%, exceeding analysts' projections of 16.6%. In the second quarter, American Airlines reported a significant 88% decline in profit to $71 million, or 11 cents per share, while revenue increased by 16.3% to $16.74 billion.
Notably, passenger revenue per available seat mile rose by 10% year-over-year, indicating some resilience in demand despite the challenges posed by fuel costs