American Airlines reduced its full-year 2026 earnings guidance Thursday, attributing the downward revision to higher fuel expenses that have outpaced revenue gains from increased ticket prices. The carrier’s stock declined 8% following the announcement, underscoring investor concerns about the airline’s ability to manage cost pressures in the current environment.
The airline now projects adjusted earnings per share could range from a loss of 65 cents to earnings of 65 cents for the full year, down significantly from its April forecast of a loss of 40 cents to earnings of $1.10 per share. The April estimate itself represented a substantial reduction from the company’s initial 2026 guidance issued at the start of the year, which had predicted earnings between $1.70 and $2.70 per share.
For the current quarter, American reported an adjusted earnings range between a loss of 70 cents per share and earnings of 10 cents per share, falling short of Wall Street’s expectation of 28 cents per share in earnings. However, the carrier forecasted revenue growth of 16% to 19% for the quarter, exceeding analyst projections of 16.6% growth. Fuel represents the airline industry’s second-largest expense category after labor costs, making price volatility particularly consequential for carrier profitability.
In the second quarter ended June 30, American posted net income of $71 million, or 11 cents per share, compared with $599 million, or 91 cents per share, in the prior-year period—representing an 88% decline. Revenue reached $16.74 billion, up 16% year-over-year. Adjusted earnings for the quarter totaled 15 cents per share. Passenger revenue per available seat mile, a key metric of pricing power, increased 10% from the prior year.
Management defended the company’s decision to expand capacity by as much as 5% in the current quarter. CEO Robert Isom stated the carrier’s objective remains closing the profit margin gap with competitors Delta Air Lines and United Airlines through fleet modernization and premium seat expansion, while noting progress on the initiative without providing a specific timeline for achieving this goal.
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