Key takeaways
- American Airlines revenue jumps 19.3% to $16.3 billion
- Quarterly fuel expenses surge $1.9 billion despite growth
- Airline now forecasts a full-year adjusted loss
American Airlines (NASDAQ: AAL) reported $16.3 billion in third-quarter revenue on October 22, a 19.3% increase from last year, but soaring fuel expenses forced the carrier to abandon its remaining hopes of an adjusted profit in 2026.
Fuel costs increased $1.9 billion, or 67.5%, during the quarter, contributing to a $269 million net loss. American also reported an adjusted loss of $182 million, equivalent to $0.28 per share.
According to the company's official earnings release, American now expects a full-year adjusted loss of $1.00 to $1.60 per share, compared with its previous forecast ranging from a $0.65 loss to a $0.65 profit.
American Airlines Revenue Rises 19% as Fuel Expenses Jump 67%
American delivered strong passenger demand despite mounting pressure from energy prices.
Premium-cabin revenue increased 22.9%, while Main Cabin revenue grew 19.5%. Corporate travel revenue climbed 27.6%, marking the sixth consecutive quarter of double-digit growth.
The figures help explain the carrier's decision to expand premium seating while eliminating traditional international first-class cabins on certain aircraft.
However, additional ticket revenue has not been sufficient to offset the increase in operating expenses.
American paid an average of $3.85 per gallon for jet fuel during the quarter, compared with $2.37 a year earlier. Total fuel expenses reached approximately $4.6 billion.
The results reflect the consequences of the broader oil price surge, which recently pushed Brent crude above $111 per barrel amid renewed Middle Eastern supply concerns.
Jet Fuel Could Reach $4.70 as American Forecasts Another Loss
The pressure could intensify during the fourth quarter.
American expects average fuel prices of approximately $4.70 per gallon, nearly double the level recorded during the final quarter of 2025.
At that price, its quarterly fuel bill would increase by approximately $2.8 billion compared with the previous year.
The airline forecasts fourth-quarter revenue growth of 19.5% to 22.5%, but still anticipates an adjusted loss of $0.50 to $1.10 per share.
American's exposure is particularly significant because the carrier does not currently hedge its fuel purchases, leaving it vulnerable to market-price fluctuations.
Earlier oil-driven market selloffs demonstrated how escalating Middle Eastern tensions can simultaneously raise operating costs and pressure transportation stocks.
Conversely, when crude prices fell in August, American Airlines shares gained 6.4%, illustrating how quickly airline valuations can respond to changes in energy prices.
What the New Loss Forecast Means for AAL Stock
American's balance sheet provides some protection against prolonged pressure.
The company ended September with $11.8 billion in available liquidity and more than $26 billion in unencumbered assets and first-lien borrowing capacity.
Nevertheless, management expects to slow network expansion in 2027 as it adjusts to elevated fuel prices.
The challenge extends beyond American. Delta recently faced similar pressure from rising fuel expenses, as highlighted in Coinpaper's October market coverage.
American's earnings also reflect a wider energy challenge for the US economy. Earlier emergency oil reserve releases illustrated the government's efforts to cushion supply disruptions.
